The Georgia legislature has passed a new state law that could make it easier for homebuyers in the state to deduct the cost of buying their first home.
The Georgia Real Estate Tax Act, which goes into effect on Jan. 1, 2018, requires homeowners to file the necessary documents with the state.
That will make it harder for those with multiple homes to deduct their mortgage interest.
Homeowners who have purchased their first house in the past five years will be able to deduct 10 percent of the mortgage interest they paid for their new home.
That’s in addition to the standard deduction that the typical homeowner receives.
The law also lets homeowners deduct the interest they pay on their mortgage if they sell their home within 10 years of purchase.
Georgia Real Estate Association President David O’Connor said homeowners should consider whether they should be required to make that tax-deductible purchase if they want to qualify for the tax break.
“If you buy a home for $200,000, you’re eligible for this tax break,” O’Connor said.
“You can deduct $250,000 if you sell the home within five years of purchasing.
But if you buy the home for under $200 million, you can’t deduct $100,000.
You can’t take that deduction if you’re paying taxes on it.”
The Georgia real estate tax is a progressive tax that applies to the homebuyer and the buyer’s spouse and any children.
The tax applies to buyers and sellers who earn more than $150,000 per year.
It applies to sales within five miles of a local school, state park, or parkland.
Georgia’s tax rate is lower than most other states, but the state’s tax code includes a provision that allows homeowners to deduct a portion of their mortgage payments for a certain period.
For example, if you pay $50,000 a year in mortgage interest, the tax-free portion of the home purchase deduction will be $50 a month.
That would be $2,500 a year if you sold your home for less than $200K, but it’s a maximum amount of deduction that can be taken for a single home.
A homebuyership tax deduction is particularly useful for homeowners who have owned a home previously, because the interest deduction allows them to deduct interest on their home in the event of the buyer selling their home.
If a homebuy-and-hold home buyer wants to deduct up to $2.5 million from the home tax, that can add up quickly.
The new law is aimed at preventing future home price appreciation, said David Ockenfels, vice president of real estate for the Real Estate Institute of Georgia.
That means the home is going to have to be sold to pay the tax, so the tax credit is helpful, he said.
“I think there are people who have a hard time understanding how this could help them,” Ockfenels said.