In Real Estate Tax

At the end of 2017, President Donald Trump signed the Tax Cuts and Jobs Act and created a flurry of emotions from several voices on the spectrum. Whether or not taxpayers are happy or nervous about this new tax code, one question remains uniform: How will this tax code affect me?

While this tax code has many pieces that make it whole, at the Hegwood Group, our focus is property tax and real estate related costs. Here are some of the key points that should be taken away when considering the new tax code and the future of your current housing costs.

    1.  Expect Changes in Your State and Local Property Taxes

During property tax season, one thing that many homeowners do is itemize deductions to help reduce the overall payment they have to make on their property tax bill. While these types of deductions were previously not limited, with the new tax code in place, there will now be a limit of up to $10,000.00 for the total payment towards state and local property taxes.

This new limit is expected to have an impact on taxpayers in that they will be less likely to itemize deductions due to the reduction of tax-related benefits of owning a home.

    2. Examining the Mortgage Interest Deduction

Yet another key change to occur after the implementation of the new tax code is one that concerns mortgage interest deduction. Mortgage interest deduction enables homeowners to deduct some of their mortgage costs on their annual taxes.

Once again, there is another reduction that may or may not have an impact on a recent homeowner’s decision to deduct. In prior years, the limit of mortgage interest deductions was $1 million. With the new tax code in place, the deduction is now $750,000. This reduced deduction applies to homeowners who have purchased homes after Dec. 15, 2017. Homeowners with mortgages prior to that date are still eligible for their current deduction.

    3. How Will the Tax Code Impact New Buyers?

What does all of this mean for real estate tax and people looking to be first-time homeowners? Well, it makes location a lot more important in the decision of a home purchase. Now, purchasing a home in a high price and high property tax area could make the investment more expensive on a buyer. Where in the past higher priced homes could grant valuable deductions for first-time buyers, now, they will definitely have to think twice, speak with a property tax consultant and really weigh their options.

However, although there is now some caution in the field, we recommend that new buyers continue to look for homes in the current economy. If first-time buyers pay attention to the interest rate changes, there will really only be a small minority of homeowners negatively affected by this code.

The Hegwood Group Helps Answer Your First-Time Buyer Questions

If you are a first-time buyer or a current homeowner that is unsure of what they can deduct from their property tax during tax season, the Hegwood Group has the assistance you need. We are a team of qualified and experienced property tax consultants that specialize in real estate tax, business personal property tax, and more. Contact us today to find out about our services and why we are Dallas’ premier property tax consultants.

 

Recent Posts