Isabelle V. Laub, GRI, PSA
Unparalleled Real Estate


While the new federal tax legislation may not affect our Bay Area housing market where the median price of a home continues to rise month-over-month, year-over-year, it does eliminate some tax benefits of homeownership and will affect the taxes of most taxpayers (but not the one you file in 2018). Generally, the new tax law lowers tax rates, however, with the loss of certain deductions and exemptions, it could push some people into a higher taxable income bracket where they may find themselves shelling out more in taxes. Obviously, each individual’s situation is unique and I defer to your tax professional for sage advice on how this new legislation affects your particular circumstance.

Following is a brief recap of the tax provisions most relevant to real estate:


  • The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap.

  • Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.

  • The final bill repeals the $100,000 itemized deduction for interest paid on home-equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.


  • Currently, taxpayers can deduct what they pay in state and local property, income, and sales taxes from their federal returns. The new law caps these deductions at $10,000. This $10,000 limit applies for both single and married filers. The bill specifically precludes prepaying 2018 state and local taxes in 2017.


  • The new law doubles the standard deduction to $12,000 for individuals and $24,000 for joint filers.

Given the overall strength of the economy and the limited inventory of houses for sale in the Bay Area, nobody expects housing values to decline. Many economists predict these changes may slow price increases in our expensive housing market which may prove very attractive to those buyers who have been priced out in recent years due to the rapid increase in home values. 
I am delighted to connect with you and look forward to discussing any real estate related questions or concerns you may have.
Isabelle V. Laub, GRI, PSA
415.533.2332 mobile
Coldwell Banker Global Luxury