Tax Proposal 'Changing the Calculus' For Second-Home Buyers

November 13, 2017
Beachfront house
Photo: Pexels

The GOP-proposed tax reform has not yet passed, however, the possibility that the second-home mortgage deduction will be eliminated has already affected homebuyers.

This workaround turns the purchase of a vacation home into a business by renting out their property, helping to cover property tax and mortgage costs. “It’s a shift from favoring owners to favoring landlords,” says Danielle Hale, chief economist for, per Bloomberg. “It adds rental inventory and reduces the time people spend at second homes potentially.”

In second-home markets across the U.S., brokers are bracing for a hit. A House version of the tax plan ... cuts the mortgage-interest deduction on second homes, and on home-equity loans, which buyers sometimes take out on their primary residence to pay for a vacation property. The Senate’s plan ... also does away with the home-equity deduction, but preserves the break for second-home mortgages.

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