The New Federal Tax Law and Motorhome Ownership

We’ll try to keep it clear and simple. We aren’t making recommendations or opining here. But we wanted to share some of what we’ve heard about how the “Tax Cuts and Jobs Act”, signed into law at the end of last year, can affect ownership of a motorhome.

The previous law allowed the deduction of mortgage interest up to $1 million for first and second homes. An initial draft of the new bill capped the deduction at $500,000. But, in part thanks to efforts of the Recreation Vehicle Industry Association (RVIA), the final bill allows the deduction of interest on loans totaling $750,000 for first and second homes, which can include RVs. For example, if you have a brick and mortar home with a $500,000 mortgage, you will be able to deduct interest on an additional $250,000 loan.

Also of note is a change to the home equity loan status, a common RV financing tool. Home equity loan interest was deductible. It’s not anymore. At last look, there is still a question of if this applies to new loans and/or existing ones. That will be sorted out in time.   

We’re talking exclusively about federal taxes here. State taxes will vary, as, of course, will your individual financial situations. You can see the RVIA’s post on the topic here. There’s also a really handy chart that clearly explains other facets of the bill and how it came to be. 

We will leave you with one recommendation. While dealers are RV experts, they aren’t necessarily tax experts. Consult your financial advisor to best understand how federal tax laws and owning a motorhome will affect your tax situation.  

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