There are some great tax advantages to owning a home
One of the many advantages of owning a home is saving money on taxes.
Part of the American Dream is a tax write-off,
The tax law obviously favors homeowners over renters who get no tax breaks. Every few years politicians under the guise of equalizing the tax laws try to take away the tax advantage for home ownership, but they never get anywhere. This might truly get people riled up enough to revolt or throw those trying to take their tax break away out of office.
Every year, homeowners are permitted to deduct the following expenses
- Real estate taxes, both state and local taxes can be deducted.
- Mortgage interest, the interest you pay on first or second home are fully deductible, well it may not be fully deductibleWhat if your loan is over $1 million or your home equity loan is over $100,000.
- If you refinance your home, only the part of the interest the would actually he used for your home or improving your home can be deducted, so if you refinance your home and take out enough money to buy a boat the interest on the amount spent on the boat will not deductible.
- Any points or fees you pay to get your loan should be deductible, but these fees are not necessarily deductible in the year to pay, that divided amongst the life of your loan so she paid $3000 in points for a 30 year loan you would only be able to deduct $100 per year, if you pay off the loan early any remaining points are fully deductible that year.
- Capital gains with no income tax. If you lived in your home any two of the last five years you can profit up to $250,000 or $500,000 if you’re married and not pay tax on that gain when you sell your primary residence.
- Home offices – If you use a portion of your home exclusively for your business you may deduct a portion of the upkeep expenses of your home in proportion to the size of your office
Now I am not a CPA or account and laws change from time to time so check with accountant or CPA to find out what tax advantages to owning a home for you.
What I can help you with is buying or selling a home or investment property. Give me a call if you’d like any information or referrals to someone that can help you with that tax advise.