Lets talk about taxes. This is one of the most asked about topics I have gotten in the past few months. The large tax reform bill will directly effect homeowners. As of yesterday afternoon the Senate budget committee has voted to send their version of the tax bill to the Senate floor later this week for a vote. The House version of the bill passed last week.
The tax bill proposes big changes to the the ability for homeowners to deduct real estate taxes and decreases the amount of the mortgage interest deduction. The Senate bill eliminates the SALT (State and Local Taxes) deduction all together, while the House bill caps this at $10,000. The Senate bill will continue to allow taxpayers to deduct mortgage debt up to $1 million, while the House version caps it at $500,000.
Both bills also aim to change the definition of capital gains for the purpose of selling a primary residence. The current law requires a homeowner to live in the house for 2 out of the last 5 years to qualify for the exemption. Both the House and Senate bills increase this to 5 out of the list 8 years.
This is a moving and changing document. Republican legislators are aiming to have the bill completed and passed by the end of the year. The articles below give a great layout of the additional differences between the two bills and how they differ in dollars to you.