Page 8 - Mar18_BuilderBrief

What the Tax Reform Law Means
to You and New Home Buyers

The Greater San Antonio Builders Association (GSABA) is fortunate to be part of the Texas Association of
Builders (TAB) and the National Association of Home Builders (NAHB). NAHB, along with key members
from the local and state associations, worked diligently on our behalf to preserve critical tax benefits
of homeownership. We owe a debt of gratitude to our 2017 NAHB Chairman of the Board, Granger
MacDonald, for his leadership as well as the NAHB Sr. Officers, Staff and Members across the nation
who met with or who engaged their elected officials.
As most of you know, President Trump signed into law the ‘Tax Cuts and Jobs Act’ that passed Congress
in December. If you haven’t seen what the law changes are, I will share a few key provisions as it relates
Kristi Sutterfield
Executive Vice President to the housing industry.
Mortgage Interest Deduction
• Reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after December 14, 2017.
Current loans of up to $1 million are grandfathered and not subject to the new cap.
Home Equity Loan Interest Deduction
• Repeals the deduction for interest paid on home equity debt through December 31, 2025. Interest remains
deductible on home equity loans (second mortgages) if the proceeds are used to improve the property.
Standard Deductions
• The new law doubles the standard deductions for individual filers to $12,000 and joint filers to $24,000 and
is indexed for inflation. This will reduce the value of the itemized mortgage interest deduction and property
tax deductions as tax incentives for homeownership because most filers are expected to take the standard
deduction rather than itemizing.
State and Local Property Tax Deductions
• In the past, this deduction was unlimited, the new law will cap the itemized deduction for state and locaL
property taxes at $10,000 and the limit is not indexed for inflation.
Moving Expenses
• The new law repeals moving expense deductions except for members of the Armed Forces.

The National Association of Realtors (NAR) recently provided a few key statistics in the 2017 Profile of Texas Homebuyers and Sellers that may be of
interest to you (you can find a copy of the 198 page study at www.texasrealestate.com/research.

The Buyer Profile in Texas in 2017 was 68% married couples, 16% single females, 8% single males and 6% unmarried couples. It was interesting
to note that 15% of the buyers purchased homes for a multi-generational household to house adult children, adult siblings, parents and/or
grandparents and 19% of the buyers in 2017 were military veterans.

The Texas Association of Realtors (TAR) in conjunction with the Real Estate Center at Texas A & M University released the 2017 Texas Housing Report
showing that the median price of a home sold in Texas was $223,990, up 6.7% from 2016. Jack Inselmann, Senior Regional Director with MetroStudy
shared with those in attendance at our San Antonio Housing Forecast held on January 5th that the new home median price as of the 4th quarter of
2017 in San Antonio was $265,000, approximately $41,000 higher.
The report states that the median age of homebuyers in 2017 was 47 (it was 46 in 2016), 24% of first time home buyers were not born in the United
States and 11% of buyers over 50 purchased a home in senior-related housing communities.
There has been a lot of speculation on how the ‘Tax Cuts and Jobs Act’ will affect homeownership as the previous law gave new homebuyers a
strong incentive to become a homeowner. The new law offers an incentive, but it is substantially less than what it was in the past.
In closing, I want to urge all of you to vote in the 2018 Texas Primaries. Early voting started on February 20th and runs through March 2nd with
election day on March 6th.

Warm Regards,

8 MARCH 2018 | GREATER SAN ANTONIO BUILDERS ASSOCIATION