By now, you’ve likely heard that the new tax plan may affect the tax benefits of owning your home in Chetek WI. There will indeed be changes concerning mortgage interest, property taxes, and even a home equity line of credit (HELOC), so be sure to read on for a brief rundown of what you can expect in the coming year as a Chetek WI homeowner.
Mortgage Interest
Mortgage interest is one of the more significant benefits of owning a home in Chetek and the way it is currently set up allows homeowners to deduct interest on a mortgage of up to $1 million. Next year, the new tax plan will allow homeowners with a mortgage in place before December 15, 2017 to still deduct interest on a mortgage of up to $1 million. For any mortgages in place after that date, there is a new cap on mortgage interest of $750,000 for all homes owned— first, second, and additional properties.
Property Taxes
For your 2017 tax return, most homeowners will be able to deduct property taxes. However, next year, property taxes will not be a separate deduction. Homeowners can instead take one deduction that will include property taxes, in addition to state and local sales taxes, and income taxes. This one deduction will have a new cap of $10,000 for married couples filing jointly.
Energy Efficiency Updates
Homeowners in Chetek WI who installed energy efficient upgrades, for instance new appliances, previously could take a deduction for the expenses. However, these tax credits expired after December 2016. If you installed solar electric or solar water heating equipment, you are still able to take a deduction through December 31, 2021, but on next year’s tax return, the date of installation will vary your credit percentage.
For installations between January 1, 2017 and December 31, 2019, 30% of the expenses are eligible for credit. For those between January 1 and December 31, 2020, the percentage decreases to 26% and for those between January 1 and December 31, 2021, down to 22%.
Home Equity Line of Credit Interest
For Chetek WI homeowners who took out a home equity line of credit (HELOC) in 2017 or before, you can deduct the interest from that loan, regardless of what you used it for— from college tuition to home renovations. Next year, the new tax plan will only allow this deduction if the HELOC was used to buy, build, or improve a property.
There are still significant perks to being a homeowner in Chetek WI and as you’ll note, the real estate market is always changing! With spring just around the corner, now is a great time to inquire about how much your home might be worth! Give Six Lakes Realty a call today to find your home value, or for a list of available properties on the market.
We look forward to hearing from you!
John Flor
Managing Broker
Six Lakes Realty
Office: (715) 924-4806
Email: john@sixlakesrealty.com