How the New Tax Laws Will Affect Utah Homebuyers

Under the new laws, many Utah taxpayers will pay less taxes, freeing up money to buy homes and spurring even more demand. Luxury home buyers to be most impacted by the changes as deductions are capped at $750,000 instead of $1 million.

SALT LAKE CITY, Dec. 27, 2017 /PRNewswire-iReach/ -- The new tax laws that go into effect January 1, leaves Utahns wondering how it might affect their plans to buy a home in the new year.

What's changing is the standard deduction for taxpayers. It will go from from $6,350 to $12,000 for individuals. For couples it's going from $12,700 to $24,000. So in theory that means less taxpayers will be able to itemize on their taxes, including taking deductions for mortgage interest.

Clark Jensen, CEO of Utah Mortgage Loan Corp., says overall the tax bill should be a good thing for Utah's housing market. "Anytime you remove artificial government intervention in the market, the market regulates itself and is more efficient," he said.

The changes, Jensen said, will mean most Utahns will pay less in taxes and have more money to put into purchases, including homes. However, with more cash to spend, that can also mean home prices will go up even more in an already hot Utah housing market. With additional economic growth, it's more likely the government will raise interest rates (to offset inflation). With those condition, those considering buying  would do best not to delay a purchase.

Current Tax, Home Equity Loans and Lines of Credit Deductions

Today, taxpayers can deduct an unlimited amount for state and local property taxes, plus income or sales taxes (or SALT). They can also deduct the interest paid each year on mortgage debt up to $1 million. In addition, they can deduct up to $100,000 in interest on a home-equity loan or line of credit.

New Deductions Under the Tax Bill (to go into effect for the 2018 tax year)

Under the new law, the state and local tax deduction (SALT) will be the same for those who itemize with one significant change—there's a $10,000 cap. For interest paid on mortgage debt it caps at $750,000. However, anyone who bought a property before Dec. 15, 2017, can still deduct interest up to $1 million (the limit under current law).

Home equity loan interest will no longer deductible for anyone.

Good time to refinance

According to Marketwatch, the $1 million/$500,000 limits apply for existing mortgages that are refinanced after this year (as long as the loan principal on the refinanced home doesn't exceed the old loan balance at the time of the refinancing).

Capital Gains

When selling a home, for the most part, a married couple filing their taxes jointly can exclude up to $500,000 in capital gains on the sale of a home (or $250,000 for single filers). To qualify, they must have used the home as a primary residence for at least two of the last five years. This isn't changing.

What Utahns will be most negatively impacted by the new law? Luxury homebuyers, or those buying or selling a home priced above $750,000 will see deductions capped at that figure rather than the $1 million figure. In Utah, that's a smaller part of the market because our median home price is in the $300-400k range. That could slow the market in the upper price ranges.

Jensen points out that with home prices going up and the possibility of interest rates going up it's better not to put off buying a home. It's also smart to refinance if your rate is 4.5% or higher.

Utah Mortgage Loan Corporation offers potential homebuyers a no obligation analysis to see what makes the most sense for potential homebuyers.

For those who are ready to buy a home in the new year, the first step is to check your credit. The company is offering a free credit report from one of the reporting bureaus. Simply call (385) 645-5395 or go to to get started.

About Utah Mortgage Loan Corporation

Founded in 1897, Utah Mortgage Loan Corporation is the oldest non-bank mortgage lender in the state of Utah, offering the full array of mortgage products available in the marketplace today. They are locally owned and operated by seasoned professionals, driven by their desire to help Utah homeowners.

Media Contact: Clark Jensen, Utah Mortgage Loan Corporation, 801-641-0848,

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SOURCE Utah Mortgage Loan Corporation



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