The answer very much depends on the circumstances. But let's make some assumptions and simplifications, and arrive at a ball-park figure.
The major contributors to itemized deductions for many homeowner taxpayers are:
- State and local taxes (income, property, disability insurance, etc.)
- Mortgage interest
State and local taxes deduction is capped at $10,000 under the new tax law. This leaves $14,000 for mortgage interest, in order for itemized deductions to exceed the standard deduction of $24,000 for married filing jointly status.
Let's assume 30 year mortgage term, and fixed 4.6% annual interest rate. By building the amortization schedule, it can be seen that a $307,000 loan has $14,020 of interest paid in the first year. Thus, that is the minimum loan size for which itemizing deductions would reduce tax liability.
Finally, assuming 20% down-payment, the total minimum price of the house comes out as $383,750. That appears to be the direct answer to the question.
One thing to note is that mortgage interest reduces every year. Therefore, house price would have to be higher than that for it to make sense to itemize deductions for few years following the purchase.
Lastly, and needless to say, one typically buys a house that he/she likes and can afford, and then files taxes in the way that minimizes tax liability, not the other way around. Thus all of the above is only a rough guidance on the possible relation between the house price and the tax filing implications.
