Whether it is for a home to live in as your principal residence or to use as rental property, the tax laws are in place but other dynamics to be concerned with are not; mortgage rates are expected to rise as well as prices.
Reasons to buy now:
- The mortgage interest deduction is intact for most taxpayers.
- The capital gain exclusion for principal residences up to $500,000 remains in place.
- Taxpayers can elect annually to take newly increased standard deduction or itemize deductions whichever will benefit them the most.
- The house payment with taxes and insurance is most likely cheaper than the rent.
- Rents will continue to rise making the difference even greater in the future.
- Lock-in the principal & interest payment with a fixed-rate mortgage.
- 30-year mortgage terms are available to most borrowers.
- Prices will likely increase due to lower inventories and several years of low housing starts.
- Section 1031 exchanges, capital gains and depreciation remain the same for rental properties.
For a summary of specific real estate provisions in the 2017 Tax Cut and Jobs Act, click here.