BREAKING: Ontario Woman Arrested on Suspicion of Killing 2 Daughters

Homeownership Will Get More Expensive for Some Residents in SoCal, Bay Area Under GOP Tax Bill

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.
A home is seen for sale in Manhattan Beach in May, 2017. (Credit: Jay L. Clendenin / Los Angeles Times)

A home is seen for sale in Manhattan Beach in May, 2017. (Credit: Jay L. Clendenin / Los Angeles Times)

The Republican tax bill that appears headed for President Trump’s desk reduces the ability of home buyers to deduct mortgage interest, which will be a hit to home shoppers in Southern California and the Bay Area, where housing costs are sky-high.

But the interest provision is far more limited in scope than a previous proposal. Real estate experts and professionals said Tuesday that they don’t expect a big effect on home buying in the region, and that any ramifications will be largely restricted to well-to-do neighborhoods.

Under the new plan, which passed the House on Tuesday and was headed for a late vote in the Senate, buyers can deduct interest on mortgages up to $750,000, for homes bought after Dec. 15. (Homes purchased on that date or before then aren’t affected.) That’s down from the current $1-million limit, but an increase from a $500,000 cap that previously passed the House.

That means a home buyer with a 20% down payment can purchase a $930,000 home and still deduct all the interest. Even for a borrower who took out a $1-million loan at 4% interest, $30,024 of interest payments are deductible in the first year, leaving $9,656 that isn’t.

Read the full story on LATimes.com. 

Notice: you are using an outdated browser. Microsoft does not recommend using IE as your default browser. Some features on this website, like video and images, might not work properly. For the best experience, please upgrade your browser.