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2018 Tax Rule Loophole for FL snowbirds!

Anyone thinking of buying or selling real estate, should research the new 2018 Federal Tax laws first. I would suggest consulting your financial adviser, tax preparer, or mortgage lender.
The new changes will have some impact on many Buyers and Sellers. It could also impact local real estate markets.
For example, Buyers will only be able to deduct interest on mortgages up to $750,000, down from $1 million. This includes combined primary and secondary residences. Along with the interest rate deduction, the new law also caps local property tax deductions at $10,000.
Additionally, the deduction on interest on home equity loans is gone. This may prompt fewer “snowbirds” to take out such a loan on their home up north to pay for their Florida home.
However, if snowbirds rent their property out when they are not using it, then it is investment real estate. They will be able to deduct all expenses, even if they reached their $10,000 limit on their home up north.
Fortunately the tax plan didn’t increase capital gains taxes on the sale of property. Homeowners will still be able to keep the profits from the sale of their qualifying homes: up to $250,000 for an individual and $500,000 for married couples.
Although these changes may impact some types of real estate, a doubling of the standard deduction for individuals and families, was raised to $12,000 for single filers and $24,000 for those filing jointly. This will give people more spendable income, which may enable them to either qualify for a mortgage, or purchase a higher priced home.
Everyone seems to have an opinion on the new tax bill. In many cases it has nothing to do with math, but is simply based their personal political beliefs.
However, I do see a potential win for the future housing industry nationwide. That is the elimination of the deduction on interest on home equity loans.
As we learned not that many years ago, way too many people viewed their home as type of cash dispersal machine. Home equity loans can be a good thing, but not when people are using them to buy luxuries or live beyond their means.
Lenders are actively promoting these loans again. It was only a few years ago that they were writing them off.
Jim Weix is Broker/Owner of The Real Estate Company, Inc., with offices in Stuart and Port Saint Lucie. He can be reached at 772-288-1900 or