Understanding The Tax Benefits Of Homebuying
With the exception of 2007, homes have increased in value nationwide one to two points above inflation levels, which is good, but it’s not an incredible return.But when you add in government incentives, you can just about live for free when you own your own home, counting getting your equity back when you sell. Did you know that when you pay points to take out a mortgage, whether you or the seller paid, you can deduct it? Hello, $1,000 or more.
One of many benefits is being able to deduct property taxes from your federal income tax return. If you’re a renter, you’re paying someone else’s property taxes and getting zero deductions. In effect, you’re throwing two percent of your net income away. And that doesn’t count the equity you’re building for your landlord.
