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7 Best Pathways to Fast Credit Repair

7 Best Pathways to Fast Credit Repair

Don't panic – there are ways of repairing your credit quickly. Here are a few ideas.

November 14, 2018
May 21, 2018

How the Trump Tax Plan Could Affect Selling Your Home

Just a few days before Christmas in 2017, President Trump signed into a law a new tax plan overhaul that is already affecting the housing market. While many homeowners won’t see much difference in their tax bill due to the changes, there are some instances where it could make a difference. If you’re selling your home, there are also a few ways that you could be affected.

Less Tax Incentives to Owning Your Home

The new tax plan takes some of the tax incentive out of buying (or owning) a home. Once, when a prospective buyer or homeowner was considering the overall cost of homeownership, they had the potential for more deductions. Mortgage interest and property tax deductions were both limited by the bill in some way, though it doesn’t affect the average Joe much since most people don’t have high enough mortgages or pay enough property tax to see any changes. While the changes made to deductions that homeowners can take will not affect many homeowners, it will cause increased tax bills for some.

Renters Not at Such a Disadvantage

Despite that most homeowners aren’t affected by the deduction changes, it doesn’t change the fact that the higher standard deduction will make the deductions from mortgage interest or property taxes less attractive to many tax payers. It won’t pay for a lot of people to itemize with the new tax plans. This means that some of the incentive people had once for owning a home is diminished, putting renters on a more level playing field. If you’re not missing out on tax benefits, this could make selling your home a little more attractive.

Potentially Lower Home Values

With less tax incentive, many people may not see as much point in buying a new home. Basic laws of supply and demand show that this could mean lower home values; when there are fewer buyers to demand homes, the price commanded by the current supply tends to be less. While home prices are currently still rising despite that many thought the market would drop as soon as the tax plan passed, who knows how long those gains will continue.

This could mean that selling sooner rather than later is akin to striking while the iron is hot.

HELOC Changes

If you’d considered getting a home equity line of credit rather than selling your home, you should know that the tax plan did have some effects on how interest can be deducted for these types of loans. If you plan to use the loan proceeds for any personal needs like vacations, tuition, or to pay off debt, you won’t be able to deduct your HELOC from your taxes.

Does the New Tax Plan Make Selling More Attractive?

Depending on your situation, it just might. If you would have once itemized deductions but the increased standard deduction means you don’t bother anymore, it could be a small incentive to sell. The same goes if you need access to your equity for personal expenses and had considered a HELOC previously. Your individual situation will help you decide whether the tax plan gives you more incentive to sell. And if you are now thinking of selling, but don’t particularly want to move, Sell and Stay could be a great option for you.

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