Americans have a new reason to take on debt during the holidays this year: early taxes.
Banks are seeing a wave of inquiries from customers in high-tax states rushing during the final days of the year to prepay 2018 property levies before a cap on deductions for state and local taxes comes into effect.
One option: tapping home-equity lines or securities-backed loans to lessen the pain of a lump-sum outlay.
Lenders including Bank of America Corp. and SunTrust Banks Inc. aren’t introducing specific products to solve the last-minute problem but are pointing clients to the credit they already have.
Counties in several states are scrambling to produce 2018 bills for individuals after officials in New York and New Jersey ordered local governments to accept prepayment of property taxes.
“The discussions we’re having now are, ‘Call your municipality and try to establish what your liability is. Call your mortgage holder,’ ” Tim Speiss, vice president of EisnerAmper Wealth Planning LLC, said in a Bloomberg Radio interview.
Bank of America is making the credit lines available mostly to wealth management customers at its Merrill Lynch or U.S. Trust units, according to a person briefed on the effort.
While the firm’s consumer bank doesn’t offer personal loans, other clients can use products such as undrawn home equity lines of credit, said the person, who asked not to be identified speaking about customer inquiries.
SunTrust is also pointing clients to undrawn personal or home-equity loans, according to a spokesman.