Interest can be deducted on up to $750,000 of total home acquisition debt… indebtedness that is secured by your primary home or a single secondary home and that is incurred to buy, construct or substantially improve the residence. Before tax reform, interest could be deducted on up to $1 million of mortgage debt. The $750,000 limit generally applies to debt incurred after Dec. 15, 2017. Older home mortgage loans are grandfathered in and get the $1-million cap. Ditto for refinancing of pre-Dec. 16, 2017 debt…up to the old loan amount. The $1-million debt limit also applies to home buyers who had a binding contract to purchase a house before Dec. 15, 2017, and who closed on it by March 31, 2018. The treatment of interest on home equity and refinance payout loans is tricky. Before 2018, you could use cash from these loans to pay off credit card debt, buy a car or take a trip, and deduct interest on up to $100,000 of the debt. Those days are gone for both existing and new home-related debt, thanks to tax reform. This crackdown doesn’t apply to home equity loans or payouts secured by a first or second residence and used to buy, build or substantially improve a home. Debt used for these purposes has always been considered acquisition indebtedness. Improvements are substantial if they add value to the home, extend the residence’s useful life or create new uses for the home. Additions and renovations count…basic repairs and maintenance don’t.