Wednesday, December 20, 2017

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4 Home Decor Trends That Are Officially Over

Avoid these four things in your next home remodel.

As we leap into a new year, Trulia’s design panel has been busy taking stock of the top trends from the past year in order to predict what will hit big in 2018 and what’s on the way out. According to the team of interior designers, organizers, and home stagers, there are four things you should avoid if you want your home to look stylish. If you’re planning a remodel in the year ahead, the design panel’s advice could help you make choices that won’t look immediately dated.

Exposed Lighting

While Edison bulbs and pendant lights have been trending for a while now, the Trulia design panel says the trend will fade out in the new year. “I am a lover of all things vintage and appreciate a nod to the past, but it just became too overly saturated,” says Hannah Crowell of Crowell & Co. To keep your lighting from looking outdated, choose options with shades. And if you’re planning a remodel, skip the exposed track lighting in favor of recessed lighting.

Granite Countertops

We never thought we’d see the day when granite countertops didn’t reign supreme, but recently, other options, including marble, quartz, and even butcher block, have stepped to the forefront. “Granite is durable, I will give it that, but it lacks the beauty of marble or the sleekness of quartz,” Crowell explains. If you already have granite counters, don’t make any rash decisions (all trends come back around, after all), but if you’re planning a kitchen renovation, you may want to consider these other options. RELATED: These Will Be the Top Home Trends of 2018, According to Pinterest

Reclaimed Wood

Joanna Gaines championed the material with her much sought-after modern farmhouse style, but according to Trulia’s panel of experts, reclaimed wood is about to fall out of favor. While the material lends a cozy, rustic vibe to any space, we could be seeing less of it in the year to come.

Bamboo Flooring

Bamboo flooring skyrocketed in popularity when companies started marketing it as an eco-friendly alternative to oak and other common flooring materials. But recently, some have questioned the material’s sustainability, and designers are tired of the trend. If you’re thinking about redoing the floors in your living room, consider another type of wood or the ultra-trendy, retro-cool terrazzo (see, every trend comes back eventually)

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6 Ways the Tax Plan Could Change Homeownership

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If the proposed tax plan becomes law, it could change homeownership in six key ways.
Would a new tax plan save you money or cost you money? The answer depends on a complex array of factors that touch on just about every aspect of your financial life. This article is about a subset of your finances: How tax reform would affect homeownership and mortgages.
The House and Senate have agreed on a compromise tax plan that would change, among other things, whether and how homeowners deduct mortgage interest and property taxes. If Republicans get their way, the bill will be passed and sent to the president before Christmas.
Here are six elements of the tax law that could affect homeownership, home selling and moving.

1. Mortgage interest deduction

The mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay. Under the compromise bill, the deduction is scaled back to interest on debt up to $750,000, instead of $1 million, for people who buy homes after Dec. 15, 2017.
The bill carves out an exception for people who were under contract to buy a home before Dec. 15, 2017 as long as they were scheduled to close by Jan. 1, 2018.
Another exception: When you refinance a mortgage, the compromise bill treats the new loan as if it were originated on the old loan’s date. That means the old limit of $1 million would apply.

2. Property tax deduction

The current tax law eases the pain of paying property taxes by allowing qualifying taxpayers to reduce their taxable income by the total amount of property taxes they pay. In the compromise bill, the deduction would be limited to a total of $10,000 for the cost of property taxes, and state and local income taxes.

3. Home equity deduction

On top of the mortgage interest deduction, current tax law adds a deduction for interest paid on home equity debt “for reasons other than to buy, build, or substantially improve your home.” So, for example, if you borrow from a home equity line of credit to pay tuition, the interest you pay is tax-deductible.
The compromise bill eliminates the deduction for interest paid on home equity debt.

4. Capital gain exclusion

When you sell a house, the capital gain is the difference between the price you paid for it and the price you sold it for. This capital gain is treated as taxable income. If you owned the house long enough, you’re allowed to exclude up to $500,000 of this capital gain as income so you don’t have to pay federal income tax on it. (The exclusion is capped at $250,000 for married taxpayers filing separately.)
The compromise bill doesn’t alter the capital gain exclusion for homes. The House and Senate had voted to limit the exclusion, but they struck that language from the final bill.
Current lawCompromise bill
Capital gainYou must have owned the home, and used it as your primary residence, during at least two of the five yearsbefore the date of sale. You cannot have used this exclusion in the two yearsbefore the sale of the home.No change to the capital gain exclusion.

5. Mortgage interest deduction for second homes

Under current law, you may deduct interest on mortgage debt on your primary home and a second home. The compromise bill kept this part of the tax law in place, although it reduced the amount of eligible mortgage debt, as seen in item No. 1 above.
Current lawCompromise bill
Mortgage interest deduction for second homesDeduct the interest you pay on mortgage debt up to $1 million($500,000 if married filing separately) on your primary home and a second home.Deduct the interest you pay on mortgage debt up to $750,000($375,000 if married filing separately) on your primary home and a second home.

6. Moving expenses

Under current tax law, you may deduct some moving expenses when you move for a new job. You have to meet complex criteria involving distance and timing of the move.
Under the compromise bill, only members of the armed forces on active duty would be allowed to deduct moving expenses.
Current lawCompromise bill
Moving expensesDeduct some moving expenses if you meet distance and time requirements.Only active duty members of the armed forces may deduct moving expenses.

Fewer taxpayers would itemize

The nonpartisan Tax Policy Center estimates that the number of itemizers would fall from about 49 million to 10 million.
The upshot: Under current law, if you’re married filing jointly, and you paid $15,000 in mortgage interest and property taxes in 2017, you would itemize those deductions because they exceed the standard deduction of $12,700.
But if tax reform raises the standard deduction for married filing jointly to around $24,000 in 2018, then that $15,000 in mortgage interest and property taxes is less than the standard deduction. So you wouldn’t itemize. You would use the standard deduction.
Whether you end up paying less tax or more tax depends on a wide range of factors beyond the homeownership-related deductions and exclusions discussed here. Every taxpayer is different.

Realtors raise a ruckus

The National Association of Realtors opposes increasing the standard deduction on the grounds that it “would destroy or at least cripple the incentive value of the mortgage interest deduction (MID) for the great majority of current and prospective homebuyers, and sap the incentive value of the property tax deduction for millions more.”
NAR argues that the de-emphasis on itemized deductions would result in “a plunge in home values across America in excess of 10%, and likely more in higher cost areas.”
Skeptics challenge the Realtors’ assertion that giving taxpayers a bigger standard deduction would cause home prices to nosedive. Logan Mohtashami, senior loan officer for AMC Lending Group in Irvine, California, says in an interview that there are always “spreadsheet people” who decide whether to rent or buy a home based on tax advantages. “But, in general, people buy homes because they want to raise their family, they want to own something, forced savings” — and not have to deal with a landlord, he says.

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