There are a lot of questions about how the new tax laws will affect homeowners and those looking to buy.

The short answer? Not much.

Mortgage interest deduction is limited. The new tax law reduces the maximum amount of mortgage dept you can deduct interest on your taxes to $750,000 from $1 million. Any loans taken out after Dec. 15, 2017, are subject to this new rule, though any existing mortgages have been grandfathered in with the old limit of up to $1 million.

The interest on a mortgage for a second home is still deductible, subject to the same $750,000 limit. Interest on home equity loans are only deductible if the debt is taken out to improve the residence, effective through the end of 2025.

Deductions on state and local property taxes are limited. Homeowners may itemize deductions of up to $10,000 for the total payment of state and local property taxes. Previously, all state and local property taxes were deductible in the federal tax filing without limit. This doesn’t affect us in Florida at all.

Standard deductions increase. The standard deduction for taxpayers doubles under the new law, to $12,000 for individuals and $24,000 for joint filers. In many cases, this change will lead taxpayers to take the standard deduction rather than itemize their filing.

How Will Housing Be Affected?

The standard deduction increase will likely lessen the incentive to itemize your deductions. This is because fewer people will be getting more than the standard deduction back if they itemize, which technically reduces the tax-related benefits of owning a home.

Less than half of U.S. homes (44 percent) were previously worth enough for owners to itemize under the previous law, according to real estate information company Zillow. Under the new tax act, that number decreases to 14 percent.

“There’s no question in my mind that initially there’s going to be this fear factor for [first-time] purchasers as to what their costs are going to be – they can’t deduct their mortgages, they can’t deduct their [property] taxes and they have to look at their total budget as to what they can really afford,” Citron says.

Of course, that simply means people won’t be itemizing deductions as much. Consumers will still need to weigh the other pros for homeownership – like building wealth through equity and appreciation in value over time. 

At the end of the day, you have to live somewhere. In Central Florida, with the exception of the cost to purchase, it is still less expensive to have a mortgage than a rent payment.