To buy or not to buy a million dollar home

I have a client that wants to buy a new home, roughly one million dollars. House plan caps mortgage interest at 500k; but 10k property tax; senate version mortgage int ok on a million dollar home but no property tax deduction. He is more concerned with the mortgage interest. If they work it out and limit the mortgage at 500k on newly purchased homes, do you think he would be okay if he bought the house before the end of the year? Just looking for opinions really.

do you think he would be okay if he bought the house before the end of the year?

It's not only when he buys the house, but when he takes out the mortgage (usually the same time, of course). I recall that mortgages already in place by 2017 year end are grandfathered in at current limits, only new mortgages are affected.

Location, location, location.

Does the client need a million dollar home? Can the client afford a million dollar home? Will client borrow more than $500K? Can client restructure investment holdings and loans to free up cash with ultimate outcome being investment interest instead of mortgage interest?

The house bill has a qualification that one must be under contract by November 2, 2017 with a closing before January 1, 2018.

If your client is contemplating a 1 million dollar home purchase and is living in Southwest Louisiana it strikes me he is going to be in pretty good shape regarding either one of the 2 tax proposals if indeed they become law . You may be falling into the trap of only analyzing 2 aspects of the tax bill (interest deduction ,and property taxes ) What about the elimination of AMT ,reduced tax rates particularly taxable income between 450 K to 1 million ,child tax credits ? When you put all this together I suspect your client will have a net tax benefit .

You have the ability to prepare tax projections doing this 3 different ways :current tax rules ,house plan ,senate plan ? Have you done that ?

That said, I would be cautious about providing specific recommendation to your client at this point because we have a long way to go before this is settled. (senate vote , house and senate compromise etc .)

So this client went ahead with the purchase of the house, he entered into a binding contract before 12/15/17 and is expected to close by Jan 15th; I can't find anything that tells me if this could be grandfathered in, the binding contract part meets the deadline but not sure about the closing on Jan 15th 2018. Any help?

Does this help?

IV) BINDING CONTRACT EXCEPTION.—In the case of a taxpayer who enters into a written binding contract before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018, and who purchases such residence before April 1, 2018, subclause (III) shall be applied by substituting ‘April 1, 2018’ for ‘December 15, 2017’

I like the part where it states, "and who purchases such residence before April 1, 2018." That sounds like a lot of leeway/grace. Does this help your client?