Tax Reform Legislation Passes Today - What It Means For Homeowners

Lawmakers in the House and Senate passed tax reform legislation today, and the President is expected to sign it before the end of the year.

The National Association of Realtors worked very hard to try to preserve the tax benefits for homeowners, and although the results are mixed, the final version is significantly better for homeowners than previous versions.  

Last-minute changes to the bill include the following improvements:

Capital gains exclusion. In a huge win for current and prospective homeowners, the current law is left in place on the capital gains exclusion of $250,000 for an individual and $500,000 for married couples on the sale of a home. 

Mortgage interest deduction. The maximum mortgage amount for households deducting their mortgage interest has been decreased to $750,000 from the current $1 million limit. 

State and local tax deductions. Both property taxes and state and local income taxes remain deductible, although with a combined limit of $10,000. 

Despite these improvements to the original, there is still hard work ahead. The National Association of Realtors and its members will continue to work with legislators to overcome unintended consequences of this new legislation and potential negative effects on the housing industry.

Read more about the major provisions of the new tax law and how it affects you.