Real Estate Blog

Median Price / SF $647

For Single Family Homes In Miami In Q4, 2017

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The New Tax Bill & The New Year

The new tax regime will fundamentally alter the benefits of home ownership by nullifying incentives for individuals and families while keeping those incentives in place for large institutional investors. That should concern middle-class families looking to claim their piece of the American Dream.

Tax Bill Overview

  • Capital gains exclusion. In a huge win for current and prospective homeowners, current law is left in place on the capital gain exclusion of $250,000 for an individual and $500,000 for married couples on the sale of a home. Both the House and Senate had sought to make it harder to qualify for the exclusion.

  • Mortgage interest deduction. The maximum mortgage amount for households deducted their mortgage interest has been decreased to $750,000 from the current $1 million limit. The house bill sought a reduction to $500,000.

  • State and local tax deductions. Both property tax and state local income taxes remain deductible, although with a combined limit of $10,000. Both the House and Senate bills sought to eliminate the state and local income tax deduction altogether.

  • Pass-through entities. The bill significantly reduces the effective rate of tax on business income earned by independent contractors and income received from pass-through entities. This change will lower the taxes of many real estate professionals.

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