While the economy has been a hot button issue of this presidential election, the top two candidates, for the most part, are steering clear of housing. At Russ Lyon Sotheby’s, I know that’s an issue weighing on many home owners and buyers. 

 

Neither Donald Trump or Hillary Clinton are showing much interest in offering homeowners new tax proposals. While the current tax benefits are huge, the candidates are more interested in other tax matters such as basic tax rates, tax-code simplification (Trump), surcharges on the rich and capital gains changes (Clinton).

 

At Russ Lyon Sotheby’s and around the country, there doesn’t seem to be much enthusiasm from voters for changing the status quo. In a July poll by the National Association of Home Builders, 72-percent of the 2,300 registered voters surveyed say they support government tax incentives in hopes that more people will be able to afford homes. 

 

The tax breaks already available for homeowners don’t appear to be going away. Here’s what’s available:  

 

Mortgage interest payments

When you get a home loan to buy a Russ Lyon Sotheby’s listed home, the interest is tax deductible, as long as you itemize. Home equity interest is also deductible — at least partially. Sometimes points are deductible, as well. 

 

Other expenses 

Along with interest, you can also deduct property or real estate taxes if you itemize. I know at Russ Lyon Sotheby’s property taxes will usually rise over time, giving you even a bigger deduction. Interest payments, though, usually decline. 

 

Tax-free capital gains

The ability to avoid paying taxes on profits on a house that gains value over time, can give you a huge benefit over quite a few years. “Singles can avoid taxes on up to $250,000 in profits on the sale of a main or primary residence, and married couples filing jointly can exclude up to $500,000.”

 

Before that happens, you must meet two tests: you must have owned your home and also have lived in it for at least two of the last five years. In other words, if you’re renting the home out, renters can’t occupy the house more than three years. 

 

If you don’t meet these requirements, I know at Russ Lyon Sotheby’s, there are some exceptions that make a home sale at least somewhat non-taxable. i.e. job move, health issues, unemployment, etc. 

 

As you can see, the tax benefits are already great for homeowners. But there’s still potential for them to be greater.