The Republican tax reform bill inched closer to the finish line, with the House voting to approve the bill along mostly partisan lines at 227-203 on Tuesday and the Senate approving it 51-48 early Wednesday morning.
However, CNN reports that the House Majority Leader’s office noted that the House would likely have to re-vote due to the Senate likely having to strip out some elements of the bill in order to pass it with a simple majority.
No Democrats voted in support of the bill in the House, however all but 12 Republicans voted in favor of the tax plan.
House Speaker Paul Ryan said of the bill, "This is without question the single most important thing we can do to once again make America the best place to do business.”
Finally fulfilling a legislative priority of a GOP-led Congress, the finalized tax reform could go down in history as the most substantial overhaul of the American tax code since the Reagan Administration.
To view the full agreement, click here.
Here's a look at what the changes could mean for future of homeowners according to CNN Money:
- Downsized mortgage interest rate deduction: New homebuyers would now only be able to deduct interest on the first $750,000 of mortgage debt on a newly-purchased home—down from the current $1 million thresholds, but higher than the $500,000 limit the House proposed in its tax overhaul in November. While the deduction has helped make homebuying more affordable for some homeowners, buyers in some cities face much higher price tags.
- Less reason to itemize: Homeowners must itemize their taxes if they want to claim the mortgage interest deduction. But since the final bill calls for nearly doubling the standard deduction, far fewer Americans are expected to itemize.
- Limit on property tax deduction: Taxpayers will no longer be able to fully deduct state and local property taxes plus income or sales taxes. Instead, the legislation allows individuals to deduct up to $10,000 in state and local income and property taxes or state and local property and sales taxes. That means homeowners living in high-tax states like New York, California, and New Jersey could see an increase in what they owe.
- Tax break stays for home sellers: Both the House and Senate bills originally wanted to scale back a tax break for homeowners when they sell their home for profit. Taxpayers will still be able to exclude up to $500,000 (or $250,000 for single filers) from capital gains when they sell their primary home, as long as they've lived there for two of the past five years. Earlier tax reform proposals would have increased the live-in requirement to five out of the last eight years.