WHAT FIRST-TIME BUYERS SHOULD KNOW ABOUT TAX REFORM

• The new limit on deductible mortgage debt is
$750,000, down from the previous $1 million.
There are certain situations which may allow
a home purchase to qualify for the $1 million,
even if the home closes after Jan. 1, 2018.
Talk to a tax professional to learn more.

• Interest paid on home equity loans is only
deductible if the proceeds are used to
substantially improve the residence.
• Interest remains deductible on second
homes, but is subject to the $1 million/
$750,000 limits.

• Homeowners who itemize their
tax returns can claim up to $10,000 total
for state and local property taxes
and income or sales taxes. This $10,000
limit applies for both single and married
filers and is not indexed for inflation.
Here’s what first-time buyers need
to know about the Tax Cuts
and Jobs Act that was signed into
law December 2017.
MORTGAGE INTEREST
DEDUCTION

• Homes priced $500,000 and below
will only be slightly impacted.

• C.A.R. estimates that 60 percent of first-time
buyers will purchase a property priced below
$500,000, and 80 percent will purchase a home
priced below $750,000, so most first-time
buyers will not feel the effect that tax reform
exerts on home prices.

• The supply of available homes for sale also
will be slightly impacted, as homeowners delay
trading up/down to their next home. Overall,
the California housing market is expected to
see a decline of 0.3 percent in active listings
in 2018 due to tax reform.
HOUSING MARKET IMPACT
DEDUCTION FOR STATE
AND LOCAL TAXES (SALT)

• Only members of the Armed Forces
may deduct moving expenses.
MOVING EXPENSES
Disclaimer: This is not intended to provide
legal or tax advice. Application of provisions
to particular tax situations need to be
discussed with an accountant, CPA,
or tax attorney.

Agent

Ryan Wharton, CalBRE#01244699

Ryan Wharton, CalBRE#01244699

Phone(805)907-9772