The New Tax Law and Real Estate

Posted by Phil Boren on Friday, January 12th, 2018 at 10:40am.

The new tax law has been passed and it contains some changes that may affect real estate markets - some more than others. For example, the threshold for mortgage interest deductions has been lowered from the previous limit of $1,000,000 down to $750,000. Also of particular interest to high-tax states, like California, is the new limit on the SALT (State and Local Taxes) deduction, which will now be limited to $10,000. As a caveat, I am not attempting to provide tax advice here, only your tax professional can do that, but I do want to provide you with some information on the differences in the new law vs. the old one. Click on the chart below to see a summary of the real-estate side of things provided by the California Association of Realtors®:



This summary provides some insight into how the new law may affect you going forward, and hopefully will help you make informed decisions. As always, you should seek professional tax advice if you have specific questions on your situation, but you can always contact us here or call/text me at 916-960-8895 if you have general questions about buying or selling your home.

We anticipate that the new tax law will impact the California markets in general because we are a high-tax state and the capping of SALT deductions at $10,000 will affect a relatively large number of people, who, historically, have counted on deducting those "high" taxes on their federal return. The increase in the personal deduction is another potentially significant change, but it will take time to see just how our state-wide and local markets react to all these changes. People will also have to balance these changes against the lower tax rates that went into place as well.

We hope you found this information helpful.


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Phil Boren
Call/Text: 1-916-960-8895
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