Homeowners: Don't panic yet over Senate tax overhaul

Wednesday, 15 November 2017, 05:40:02 AM. If you hoped that Senate Republicans would treat homeowners and buyers more kindly in their tax overhaul plans than their colleagues did in the House, you were an optimist. It didn’t happen.
If you hoped that would treat homeowners and buyers more kindly in their tax overhaul plans than their colleagues did in the House, you were an optimist. It didn’t happen. In fact, the Senate tax bill released last week is harsher on residential real estate in some areas than the House version, with two notable exceptions: Senate tax writers retained the current $1 million ceiling on home mortgage amounts that are eligible for interest deductions. The House bill seeks to cut that in half to $500,000. But the Senate's seeming concession has limited value, given that only a small fraction of homeowners in the U.S. have mortgages of $500,000 to $1 million. Also, the Senate bill leaves intact mortgage-interest deductions on second homes; the House bill would eliminate them. Here’s a quick look at some key punitive details in the Senate bill’s fine print that haven’t gotten much attention but could be important to you: Home equity loans. Under current law, you can borrow up to $100,000 in “home equity indebtedness” and write off the interest on that amount. Home equity loans have become enormously popular in recent years — especially in the form of lines of credit — as owners’ equity holdings have soared to record levels. In the first quarter of 2017 alone, according to Attom Data Solutions, 227,000 new HELOCs worth $43.4 billion were originated around the country. HELOCs are hot. One traditional attraction of HELOCs and other forms of home equity loans is their flexibility. You...Read more
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