As we enter homebuying season (yes, there’s a season: it runs roughly March through September), would-be buyers may be wondering about how the new tax laws will shape their experience. Because the bill only passed at the end of 2017, there are still a lot of question marks — and no solid statistics. Still, the bill contains a couple of clear provisions more likely to affect Miamians, particularly those purchasing properties priced at $750,000 and above. Here are three things we know so far.

Mortgage Interest Deductions are Lower

Homebuyers seeking mortgages over $1 million can no longer write off the interest of their mortgages. The amount that’s eligible for a tax write-off is now $750,000. This applies for both homes and second homes. Note we said “homebuyers” and not “homeowners.” That’s because the change will only affect new loans. Anyone with existing loans over $1 million will be grandfathered in. According to the Miami Herald, industry professionals think this deduction change could impact sales for residential properties priced between $750,000 and $1 million. Although, per the Herald, experts differ on how important that market is, Miami is a common choice for high-end second homes in particular. 

Write-Offs for Income, Sales, and Property Taxes Are Capped

Before the new tax bill, there was no limit to deductions for income, sales, and property taxes. Now, it’s capped at just $10,000. The change sounds drastic, but it’s less of a big deal for existing Florida residents: after all, there aren’t any state income taxes. Moreover, some real estate professionals think it could help boost sales in the $750,000 to $1 million range discussed above — homeowners of high-value properties in other states might be more inclined to pack up and move to South Florida.

Miami’s Tax-Friendly Climate Could Mean New Arrivals

Although the evidence is largely anecdotal, people in states like New Jersey and New York are purchasing in South Florida because of its friendlier tax climate. In those states, high-income residents with high property values have only a $10,000 deduction for income and property taxes. Real estate developer Vanessa Grout told the Herald that three penthouses in the Brickell Flatiron buildings — soon to be one of the tallest buildings in the United States — were purchased during the first two weeks of January alone. Grout also told the Herald that web traffic from New York-based buyers has tripled.

Despite these three takeaways, there’s more for buyers to consider than just the tax law alone. According to CNN, the average rate of a 30-year fixed rate mortgage increased to 4.40 percent at the end of February, marking the seventh consecutive week of increasing rates. There’s also a continued shortage of single-family homes for sale locally. Combined, those issues mean buyers may be getting less bang for their buck amid a competitive landscape. However, it’s still more affordable to rent than own in South Florida. Moreover, buyers may come to the table with more money in their bank accounts thanks to lower federal income taxes. In those cases, the overall effect of the tax bill could be a wash.