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WILL THE NEW TAX LAW AFFECT MY MORTGAGE INTEREST DEDUCTION?

The Tax Cuts and Jobs Act was signed into law by President Trump on December 22, 2017. The new law reduces the limit on deductible mortgage debt to $750,000.00 for new loans taken out after December 14, 2017. Current loans of up to $1,000,000.00 are grandfathered and are not subject to the new $750,000.00 cap. Neither limit is indexed for inflation. Homeowners may refinance mortgage debts existing on December 14, 2017 up to $1,000,000.00 and still deduct the interest so long as the new loan does not exceed the amount of the mortgage being refinanced. The final bill repeals the deduction for interest paid on home equity debt through December 31, 2025. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence. Interest remains deductible on second homes, but is subject to the $1,000,000.00/ $750,000.00 limits.

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