How The Tax Act of 2017 Will Affect the Commercial Real Estate Investors and Homeowners.
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by Gene
- April 15, 2019
- RealEstate News
- 0
By: Zahavit Paz
Tax Cuts and Jobs Act of 2017 and the Commercial Real Estate Investor
There is good news for the commercial real estate investor. Through the Tax Cuts and Jobs Act, Real Estate investors can deduct interest and real estate taxes on investments without the limits imposed on deductions for interest and taxes for an individual homeowner.
Section 1031 like-kind exchanges. The 1031 rules for like-kind exchanges for real estate investment property remain unchanged. Section 1031 like-kind exchanges of personal property are no longer allowed.
The corporate income tax rate is reduced. The federal corporate tax rate was cut from 35% to 21%
For Individual Homeowners more tax deduction restrictions will have a negative impact.
Homeowners with large mortgages should pay special attention to the new tax code as interest deductions on certain mortgages are limited.
The new Act will affect many homeowners and limits their deduction on the home mortgage it will affect their affordability due to the limitation on federal and state local deduction. Here is why? The Tax Cuts and Jobs Act of 2017 have new restrictions on mortgage interest and state and local tax deductions.
The final bill reduces the limit on interest deductible on mortgage debt to $750,000 for new loans taken out after 12/15/17, Loans existing on 12/15/2017 of up to $1 million are grandfathered and are not subject to the new $750,000 cap.
What does it mean to the individual owner of real estate
What does it mean to the individual owner of real estate?
In the past when you filed your individual federal income taxes you were able to take an itemized deduction for your real estate, rental property property and state and local income taxes paid. The final bill limits the amount of the state and local tax deduction (including property taxes) to $10,000. This $10,000 limit applies to both single and married filers.
These new rules will impact the second homeownership of apartments in the New York City market. These apartments may take longer to sell.
Overall, the long-term effects and the outlook for the housing market are positive and the dream of owning your home still exists. On the brighter side, the lower federal income tax rate on individuals can be a boost for the market as individuals will have more cash to save and spend on housing
High-end home prices are being slashed by as much as 30 percent. NYC market report articles
“The luxury real estate market in Manhattan is sagging. The GOP tax law is hitting real estate markets across the nation.’
“Local real estate became a buyer’s market in 2018—displaying all the inconsistency that has plagued the industry for much of the year.
A new report by Warburg Realty underscores how those looking to sell have been pushed to reconsider strategies through negotiations, price reductions, and incentives. “
The Real Estate Market Recovery and Retreat in New York City
The Real Estate Market Recovery and Retreat in New York City
Always before you decide to make a real estate buying and selling you should consult with online broker your accountant, your real estate lawyer, and your real estate active trader, broker to make sure it fits within your budget limits.
Don’t Dream your life, live your dreams.
Lets, Pazo Realty help your dream home became your reality.
Zahavit Paz
Residential and Commercial Real Estate Broker
646.330.0180
info@pazorealty.com
