Tag Archives: mortgage tax deduction

How the Senate tax plan affects San Diego housing

The Senate bill would keep the mortgage interest deduction as is, except remove an equity debt deduction of up to $100,000. The House plan would lower the annual mortgage interest deductions to newly issued loans totaling no more than $500,000, down from $1 million right now. This is a major concern for real estate agents because homes in San Diego cost more than the rest of the nation.

As of the start of November, 3,651 out of 32,900 homes had sold in 2017 for more than $1 million in San Diego County, said ReportsOnHousing. In the same time period, 17,862 homes sold for more than $500,000.

What does that mean for buyers: Typical buyers put 10 to 20 percent down, so most San Diegans will not be affected by the deduction yet. The luxury market is another story.

What does it mean for affordability: The bills both look to nearly double the standard deduction, so people might have more money in that regard. However, both the Senate and House versions of the bill would curtail the state and local income tax deduction as they are now (the Senate version includes an amendment to allow deductions of up to $10,000 for state and local property taxes). Because taxes are high in California, it could mean less income for potential buyers.

How will millennial buyers fare: Many millennials have student loans, especially those being recruited by tech companies in California, that could prevent them from having enough money for a down payment. The House bill would remove the student loan interest deduction, which allows borrowers to get back up to $2,500 a year. The Senate bill leaves the deduction alone. There were 1.1 million student loan deduction claimants in California in 2016, said the National Association of Realtors.

read more at: http://www.sandiegouniontribune.com/business/real-estate/sd-fi-tax-plan-housing-20171204-story.html

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Tax Benefits for Homeowners in the Fed Gov Budget for 2016

Homeowners and mortgage borrowers also count as special interests on Capitol Hill, and this year’s Christmas tree is sprinkled with tax benefits for them as well. Some could even lower your next tax bill.

Home improvements you made during the past year that conserve energy, such as putting in new insulation, more efficient windows or an exterior door. You may be eligible for a 10 percent tax credit on their cost, up to a maximum credit of $500. Tax credits come directly off your bottom-line federal tax bill, so a $500 credit is more valuable than a $500 deduction, which is tied to your marginal tax bracket.

The federal budget bill that Congress passed along with the extenders legislation also reauthorized the biggest home energy-efficiency tax subsidy of all: the 30 percent credit for installing “renewable energy” improvements such as solar panels and wind and geothermal equipment. There is no dollar limit on what you can claim as a credit on these improvements, but the equipment must be purchased by you outright and installed on your principal residence. If you don’t own the solar panels on your roof, you don’t qualify for the credit.

Another key extension in the tax bill: Deductions for mortgage-insurance premium payments. Millions of home buyers who make down payments of less than 20 percent are charged mortgage insurance premiums or guaranty fees, whether for conventional loans (those eligible for sale to Fannie Mae or Freddie Mac) or government-backed Federal Housing Administration (FHA), Veterans Affairs (VA) or Rural Housing loans backed by the Agriculture Department.

Read more at: https://www.washingtonpost.com/realestate/classic-christmas-tree-bill-has-goodies-for-ordinary-homeowners/2015/12/21/ee9c140c-a810-11e5-9b92-dea7cd4b1a4d_story.html?hpid=hp_hp-cards_hp-card-realestate%3Ahomepage%2Fcard

Disclaimer: for information and entertainment purposes only