1. Tax Cuts and Jobs Act (TCJA) – The TCJA, which came into effect in 2018, significantly impacted the real estate industry by reducing the deductibility of state and local taxes, including property taxes, to a maximum of $10,000.
2. First-Time Homebuyer Assistance – Many states offer programs that provide down payment assistance, lower interest rates, and other incentives to first-time homebuyers, making homeownership more accessible.
3. Home Mortgage Interest Deduction – The mortgage interest deduction allows homeowners to deduct the interest paid on their mortgage from their taxable income. However, the TCJA reduces the limit on the deduction for mortgages taken out after December 14, 2017, to $750,000 from $1 million.
4. Section 1031 Like-Kind Exchanges – 1031 exchanges allow property owners to defer paying taxes on the sale of a property if they use the proceeds to purchase a like-kind property within a certain timeframe. Proposed changes to 1031 exchanges may impact real estate investors.
5. Federal Housing Administration (FHA) Loan Limits – The FHA sets loan limits for mortgages it insures, which can affect the affordability of homes in certain areas.
6. Housing and Urban Development (HUD) Guidelines – HUD sets guidelines for affordable housing programs and provides funding to states and localities for affordable housing initiatives.
7. Opportunity Zones – The Opportunity Zone program offers tax incentives for investors who invest in designated low-income areas, potentially leading to increased property values and revitalization of neglected neighborhoods.
8. Energy Efficiency Standards – Many states and localities have instituted requirements for energy-efficient building construction, appliances, and utilities. These mandates can impact construction costs and home values.
9. Property Tax Assessment and Valuation – Property tax assessments and valuations can impact property taxes and the value of homes, leading to potential disputes and appeals.
10. Real Estate Transfer Taxes – State and local governments impose real estate transfer taxes on the purchase or sale of property, which can increase the cost of homeownership and affect property values.