Those who bought 1M+ homes
Recently discovered that mortgage interest could only be deducted for mortgages upto 1M and that has been reduced to 750K starting this year. To those who bought houses in the last few years, what was the thought process? Was it "you need to live somewhere"? To those planning on buying in the next few years, how does this affect you? Are there any clever legal ways to work around this?
Work around what? If you are relying on the tax deduction to afford your home, you bought too much home. You want a legal workaround? Call up a CPA or make more money. Alternatively buy a DeLoran, drive it up to 88mph, go back in time, then tell yourself not to buy the house you couldn't afford.
The Libyans WILL do the needful on your ass and it won't be kind!
This. Minus the time travel. If you discover time travel, never use it. You will only make things worse. Trust me, I know.
250k difference would make less than $200 in monthly tax saving. For people who can afford 1M, that is almost nothing.
People try to optimize for $200 in HOA fee. I don't think $200 is insignificant.
The 200$ difference is for a 1M mortgage. It would be higher for most buyers buying in SF. $3-5K every year is significant
If you plan on staying in the house 5+ years it’s fine to buy
Uncle Sam is a cheat. Need more money? Steal it away from tax payers
Need roads? Build your own!
OP you are grandfathered in if you bought before a certain date in 2017
Tax deduction is just icing on the cake. Alternatively if you bought a rental the taxes were slashed heavily this year!
I have a feeling, OP thinks, if the mortgage crosses 750k, nothing will be admissible. Even people with 1m+ homes can claim interest till 750k or 1 m if bought before dec 15 2017. Property tax deductions are capped at 10k. That is another concern as well if house price is higher.
That is not what OP thinks :) Fully aware that interest on mortgage upto 750K is deductible.
Alright. Wasn’t clear in the question. Thx for clarifying. In that case, I would say, if the deduction is imp., buy a lower priced home or jack up your down payment. Again this is applicable till 2025. If it falls off at that time, you would have paid most of your interest by that time according to amort schedule. Say for 1.2m house, dp 100k, 5% rate 30y, you would pay apprx. 350k as interest by 2025.
Can’t deduct your property taxes either right?
Lol good luck to anyone with the coming correction
You mean the one people have been waiting for since 2015?
Yeah but real estate correction will happen after stock market one ..
Have wife and kid. Need somewhere that I can't get forced to move from.