Analysis from all-in-one homebuying service Open Listings shows that the proposed Tax Cuts & Jobs Act will impact most potential homebuyers living in major metro areas where property values are often higher than the
Homebuyers living in competitive markets, especially first-timers with FHA or
For them, lower mortgage tax deduction limits with the Tax Cuts & Jobs Act could mean rising homeownership costs. This especially hits hard for
According to the Open Listings database, 48.4% of all active listings in
As it stands, the Tax Cuts & Jobs Act:
- Cuts mortgage debt write-offs to
- Limits the amount of property taxes you can deduct to
- Eliminates your ability to deduct state and local taxes
For homeowners, these write-offs can amount to thousands, especially in the first few years of homeownership when mortgage interest is at its highest.
Those who buy a home under this proposed tax plan will likely find that the cap to the mortgage deduction leaves them doubly-taxed if their loan is over
The bottom line
Right now, there's no way to tell if the "Tax Cuts and Jobs Plan" will get through the
While only potential buyers and their financial advisor can ultimately make the decision if buying a home is the right choice, the next few weeks may be a good time for buyers thinking about getting into the market, as the proposed tax plan will not affect mortgages originated before it passes.
SOURCE Open Listings