Not good for Residential Real Estate in high priced areas.
High Cost Homes are going to see price reductions.
Not sunny days ahead
I believe this will reduce number of sales to w-2 two family income earners from purchasing a home with sale price higher than one million dollars.
It will particularly squeeze values in Coastal Areas where prices from
one million to two and a half million dollars that Borrowers want the
tax credit to make it work financially.
This doesn't matter much to self employed borrowers who already pay little or no tax with allowable deductions
The act repeals the overall limitation on itemized deductions, through 2025.
Mortgage interest: The home mortgage interest deduction was modified to reduce the limit on acquisition indebtedness to $750,000 (from the prior-law limit of $1 million).
A taxpayer who entered into a binding written contract before Dec. 15, 2017, to close on the purchase of a principal residence before Jan. 1, 2018, and who purchases that residence before April 1, 2018, will be considered to have incurred acquisition indebtedness prior to Dec. 15, 2017, under this provision, meaning that he or she will be allowed the prior-law $1 million limit.
Home-equity loans: The home-equity loan interest deduction was repealed through 2025.
State and local taxes: Under the act, individuals are allowed to deduct up to $10,000 ($5,000 for married taxpayers filing separately) in state and local income or property taxes.
The conference report on the bill specifies that taxpayers cannot take a deduction in 2017 for prepaid 2018 state income taxes. This part is pretty terrible. In California property taxes on a one million dollar home are about thirteen thousand dollars a year.
