In a victory for NAHB Remodelers, the IRS today issued a letter clarifying changes to home equity loans and lines of credit to confirm that households may take a tax deduction when these loans are used for home improvements.
The tax law enacted in December cut the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan, the letter said.
“This is a major victory for remodelers and for home owners who want to invest in their homes,” said NAHB chairman Randy Noel. “NAHB has been pushing hard for this outcome since December, when act was signed into law. We will continue to work with Congress and the Administration as they hammer out the details of the new tax law.”