If you are thinking of buying a second home, you may want to think again. That's because the rules on deductions for owning a second home will change in 2018 once the just-passed tax

bill takes effect. The massive overhaul lowers the mortgage interest deduction to $750,000 from $1 million. That cap applies to all homes. The $1 million limit will remain for homes that

were purchased before Dec. 15. If you already have a $750,000 mortgage and plan to buy a second home next year, you will not be able to deduct the interest on that loan, according to Tim

Steffen, director of advanced planning at Baird Private Wealth Management. If you have a smaller mortgage, let's say $600,000, up to $150,000 of additional debt would be fully

that cap," said Eric Hananel, principal at accounting firm UHY Advisors, NY Inc. Under current tax rules, about 44 percent of homes are worth enough for homeowners to take advantage of

the mortgage interest deduction by itemizing their expenses, according to real estate website Zillow. The portion of eligible homes would dip to 14.4 percent under the new tax law, Zillow

projects, particularly as the standard deduction is nearly doubled from existing amounts. Buyers should also keep in mind that the legislation may drive down the price of some real estate,

Hananel said. "My belief is that the second home market will be impacted even greater," Hananel said. I would urge them to sit back and see the impact of the tax legislation and

how it affects the real estate market, he said. Markets that will likely see the most change in value are the ones where residents are more likely to use the mortgage interest deduction,

according to Zillow. Those effects will be most evident in pricey coastal markets while other markets could mostly remain stable, Zillow senior economist Aaron Terrazas said. The real estate

website ranked the U.S. counties where the interest on the first year of a loan would be high enough to justify taking the mortgage interest deduction. Percent of homes under current law

Percent of homes under proposed compromise bill County Name State Name 100% 99.81% New York New York 100% 99.51% San Francisco California 100% 98.94% San Mateo California 100% 98.49% Santa

Clara California 99.99% 96.85% Marin California 99.80% 84.59% Kings New York 99.93% 82.46% Queens New York 99.40% 80.45% Alameda California 99.84% 77.81% Westchester New York 97.35% 74.83%

Maui Hawaii _Source: Source: Zillow_ Zillow also identified the counties where the interest on the first year of a mortgage loan likely would be too low for residents to take the mortgage

interest deduction. Percent of homes under current law Percent of homes under proposed compromise bill CountyName StateName 0.37% 0.00% McKinley New Mexico 0.36% 0.02% Jefferson Arkansas

1.62% 0.03% Livingston Louisiana 9.09% 0.04% Bullitt Kentucky 0.69% 0.05% Wayne North Carolina 8.24% 0.06% San Juan New Mexico 5.08% 0.06% Clark Indiana 8.01% 0.06% Isabella Michigan 2.75%

0.06% Northumberland Pennsylvania 4.31% 0.07% McCracken Kentucky _Source: Source: Zillow_ Buyers should not base their decision on whether to purchase a second home solely on taxes, experts

said. "I don't think you should be so close that the tax implications are going to make or break the deal," said Mark Steber, chief tax officer at Jackson Hewitt. There are

several other criteria buyers should consider before signing on a second home. MAKE SURE YOU CAN AFFORD IT Evaluate why you want to buy the property and if you will be able to cover the

maintenance costs, said Peter J. Creedon, CEO of Crystal Brook Advisors in New York. "It's not just what you will pay for the mortgage," Creedon said. "It's all the

other things that will have to go into the house." That includes maintenance for everything from a fresh coat of paint to major repairs that inevitably crop up. WATCH OUT FOR HIDDEN

EXPENSES Many second homes come with a vacation-type atmosphere — and that often costs more. That includes fees for communities or homeowners associations. You also want to look at other

expenses that will drain your cash flow, including whether you will keep a car there, and how often you will eat out and entertain visitors. "In many cases, you're better off going

to the swankiest hotel in town and having room service every day and it will still be cheaper," said Ron Weiner, partner and managing director at RDM Financial Group at HighTower

Advisors in Boca Raton, Florida. UNDERSTAND THE RULES FOR HOW YOU USE IT The tax rules are different for a rental property versus a vacation property. And mixing both could unwittingly put

you in violation of IRS regulations. Watch out for IRS rules that define the property based on how you use it, Hananel said. For example, if you use the property for more than 14 days of the

year, it is considered a personal residence rather than a rental property. MORE FROM PERSONAL FINANCE: Here are five breaks you'll miss the most in the GOP tax bill These changes under

the GOP tax plan affect homeowners Tax bill kills this key strategy for how you save for retirement