The tax reform bill has been signed into law. How does the final bill impact real estate?
The good news is that the capital gains exclusion remains. Basically, you do not have to pay taxes on a certain amount of profit from your home sale. If you are single, the limit is $250,000. If you are married, the limit is $500,000.
The mortgage interest deduction stayed in tact, which is also good. The cap did go down from $1 million to $750,000.
They were trying to eliminate state and local tax deductions altogether, but instead, there is a $10,000 limit. That is pretty good for Memphis. A buyer came in from New York, and their property taxes were $50,000, so $10,000 is a pretty good deal. It may not be what we wanted, and people within the city limits have probably seen more than that, but it’s better than eliminating state and local deductions entirely.
That is what we know so far. Everybody will see some benefits from the tax reform in different aspects, and there was some good news in the final bill for real estate.
If you have any other questions about our real estate market, please don’t hesitate to give me a call or send me an email. I would be happy to help you.