As homeowners, we need to pay attention to how this proposed tax bill will affect us if passed.
No doubt, it will affect most of the California homeowners, especially in urban areas negatively than positively. What we can do is to read about to get well informed, and take actions accordingly.
Based on the California Association of Realtors’ interpretation, here are 6 ways that would directly affect homeowners:
- Cuts the mortgage interest deduction cap in half from $1 million to $500,000.
- Homeowners would no longer be able to deduct the interest on home equity loans.
- Eliminates state and local income tax deductions.
- Caps property tax deductions at $10,000.
- Requires five years instead of two for exclusion of capital gains tax on the sale of a primary home and is phased out at higher income levels.
- Eliminates the mortgage interest deduction on second homes.
Further, here’s a quote from the chairman of National Association of Home Builders:
“The House Republican tax reform plan abandons middle-class taxpayers in favor of high-income Americans and wealthy corporations… The bill eviscerates existing housing tax benefits by drastically reducing the number of home owners who can take advantage of mortgage interest and property tax incentives… By undermining the nation’s longstanding support for homeownership and threatening to lower the value of the largest asset held by most American families, this tax reform plan will put millions of home owners at risk.”
Keep an close attention to what the Congress is doing on this bill, and take action such as calling your Congressman/woman if you feel so moved!
Read more on Forbes magazine Article.