Sterling, VA -- On Tax Day, many homeowners in Virginia’s 10th Congressional District will take a hit under the new law passed by Congressional Republicans according to a report from the House Committee on Oversight and Reform released today by Congresswoman Jennifer Wexton (VA-10).
“Donald Trump and Republicans in Congress chose to prioritize outsized and irresponsible tax cuts for large corporations over middle class families, and today, Virginians are footing the bill,” said Congresswoman Jennifer Wexton. “Home ownership is already moving further out of reach for too many Americans. Virginia families are playing by the rules, they deserve tax laws that will work for them and reward them for doing so.”
Homes are often the largest source of savings for American families, and homeowners generally build equity with each mortgage payment they make. Since Congress enacted a federal income tax more than a century ago, homeowners have been allowed to deduct interest on their home loans, as well as on property taxes on their homes.
Under the Republican tax law, homeowners are now prohibited from deducting interest on home equity loans if they use the funds for unexpected medical emergencies, to pay for college education, or for any purpose other than home improvement. This retroactive provision applies even to future interest payments on loans taken out by homeowners in the past. Homeowners also are no longer allowed to deduct property taxes on their homes to the extent that state and local taxes, including property taxes, are more than $10,000.
The report was prepared by the staff of the House Committee on Oversight and Reform at the request of Congresswoman Wexton. It summarizes the specific effects of the Republican tax law on homeowners in Virginia’s 10th Congressional District based on multiple sources of data. The report finds:
None of the approximately 199,100 homeowners currently living in Virginia’s 10th District will be allowed to claim deductions for interest on home equity loans they use for any purposes other than home improvement.
About 36,700 homeowners in Virginia’s 10th District with existing home equity loans will not be allowed to claim full home equity interest deductions on their 2018 taxes as they did in the past.
Although 179,000 homeowners in Virginia’s 10th District had been permitted to deduct their full property taxes, about 59,800 will no longer be allowed to do so.