Word spread quickly in the days leading up to tax reform: The home mortgage interest deduction was on the chopping block. ultimately, the deduction was spared, but the amount of home mortgage.
I am a salaried individual looking to buy a plot of land and build a house on it later. I don’t have any other housing property in my name. What conditions do I need to meet to avail a housing loan.
In 2017, mortgage interest included that which you paid on loans to buy a home, on home equity lines of credit, and on construction loans. But the TCJA eliminates the deduction for home equity debt as of 2018 unless you can prove that the loan was taken out to "substantially improve your residence." You must indeed use the money for that purpose.
Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, or a second mortgage. You can deduct home mortgage interest if all the following conditions are met.
A mortgage for other purposes is treated as a home equity loan and now gets no interest deduction. If you refinance a mortgage that counted as home acquisition debt, the refinanced mortgage will.
Rules on deducting home equity loan, HELOC or second mortgage interest. How much you can deduct: So long as you meet the criteria mentioned above, you can deduct interest paid on debt up to $750,000 (for married couples) or $375,000 (individuals).
With all that background information in mind, let’s now focus on when you can and cannot claim itemized qualified residence interest deduction on home equity loans for 2018-2025 under the new TCJA.
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What the new tax law will do to your mortgage interest deduction By Bill Bischoff. Published: Feb 9, 2018 5:56 a.m. ET. Share. New limits on home mortgage interest deductions .