North Texas homeowners as well as homebuyers are mutually concerned about the impact that the recently approved Tax Cuts and Jobs Act will have on them. The main points of the possible effect will be in the mortgage interest deduction and also property tax deductions now being capped. The new bill will limit the mortgage interest deduction to $750,000 as compared to $1M before the new legislation. Secondly, the property tax deduction is limited to a maximum of $10,000 as well.
The immediate assumption is that the new tax regulations will mostly affect the higher end of the North Texas housing market and especially the homes valued between $750,000 and $1M.
However, some of the other parts of the new tax reform could prove to be a positive for both homeowners and homebuyers. The surprisingly large reduction in the corporate tax rate could encourage businesses to increase bonuses and wages, provide more employee benefits and more which could potentially limit or negate the impact on homeowners and potential homebuyers.
It is certainly way to early for North Texans to know how impactful the new housing and tax reform will be for them, but it is certainly going to have our purposeful attention in 2018!
Steve Lester, REALTOR® is with Keller Williams Realty living in Allen, Texas.