With the passing of H.R. 1, a huge piece of legislation, many provisions in this bill will have an impact on the housing and mortgage industries. We thought we would use this opportunity to break down a few key sections to help you get a better understanding of what’s to come.
- Tax deductions for mortgage insurance premiums. This bill creates a permanent rule in place that allows a tax deduction for all types of mortgage insurance premiums (private, FHA, VA, USDA), subject to income restrictions
- Mortgage interest cap made permanent. It solidified the ability to deduct mortgage interest on loans up to $750,000 used to acquire a primary residence.
- Temporary SALT cap is increased. The SALT (state and local tax) cap was $10,000 but has been raised to $40,000 through 2029 with a phase-out for incomes over $500,000. This could be beneficial for higher tax base states like Illinois.
- Depreciation and investment properties. For qualified properties, real estate investors can deduct 100% of improvements in the same year if placed in service January 19, 2025, through January 1, 2030.
There were several other provisions that dealt with the funding of the Consumer Financial Protection Bureau (CFPB), increasing funding in some low-income, underserved areas while cutting others. The four listed above could be great talking points and shareable knowledge via your social media platforms, seminars, and individual client outreach. Partner with a Key Mortgage loan officer to see how you can get creative and use this information to help inform and engage your sphere and followers — and maybe create a heck of a third and fourth quarter for yourself!
