Starting this year, under the Tax Cuts and Jobs Act, homeowners can only deduct the interest on the debt if the money from a HELOC went toward buying, building or substantially improving the home that secured the loan.
Here's the loophole: There's no clear way for the Internal Revenue Service to ensure that this is how you're using the money.
In theory, you could use your line of credit or your home equity loan to pay your bills or go on vacation and attempt to deduct the interest on your taxes.
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"From my knowledge, banks don't verify that you spent it on what you say you spent it on," said Dave Stolz, an accountant and member of the American Institute of CPAs personal financial specialist credential committee.
"There is no box for you to check, which puts the onus on the taxpayer and makes it scarier for the taxpayer," he said.
Here's what you'll need to know about a HELOC under the new tax law.