As of December 2017, a new set of tax laws are in effect. Let’s review what these changes mean for you.
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As we near the fourth quarter, the time to think about taxes also draws close. And because of the new tax laws implemented by Congress in December of 2017, there are a few crucial points homeowners must understand before filing.
Thankfully, one point which has remained the same—homeowners can still sell their primary residence tax-free, so long as they meet three conditions:
1. The property must have been their primary residence for at least two years.
2. The property must have been the primary residence for at least two of the last five years.
3. The homeowner can’t have excluded another property within the last two years.
So long as these conditions are met, married couples can sell their property for up to $500,000 tax-free, and single homeowners can sell their property for up to $250,000 tax-free. As advantageous as these tax benefits are, it’s no wonder homeowners are buying and selling primary residences with greater frequency.
As advantageous as these tax benefits are, it’s no wonder homeowners are buying and selling primary residences with greater frequency.
Another important tax change to be aware of is that PMI (private mortgage insurance) is no longer deductible. This development means saving for your down payment will be more important than ever. Mortgage interest, though, is still deductible for existing loans up to $1 million and new loans up to $750,000.
Property taxes are also still deductible, yet now hold a $10,000 limit. In our area, this limit is generally sufficient. Yet this change may have a more severe impact farther north where property taxes are higher.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.