Home equity loan’s interest deduction

One of the appeals in purchasing a real estate property is the ability to use the equity. In fact, families have been using the equity for expenses such as school tuition, purchasing a second home, home improvement and other expenses. Prior to the change in the tax code, homeowners had the ability to deduct interests paid on the home equity loans. However, the new tax law limited this ability. In effect, the interest is only deductible when the loan is used to purchase another property, for renovation or to substantially improved the property. Unlike the previous tax law, the new one does not allow deductions for any other expenses such personal, tuition and other non real estate related expenses.Limitations and restrictions might apply.Talk to a tax advisor for your specific case. 

 

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