Major Tax Advantage of Buying a Home
Yesterday we talked about the tax implications of selling a house; it’s only fair that today we turn our attention to the tax implications of buying a home. With April 15th rapidly approaching, now is the perfect time to talk about one of the greatest tax deductions available.
Is buying a home an expensive proposition? Most definitely! Is it stressful and time consuming? Again, you bet it is! But…..
There is a caveat, and that caveat appears in the form of a major tax deduction. When you file your federal and state income taxes, you’ll be able to deduct not only the mortgage interest but also the property taxes, assuming your loan is for one million dollars or less.
Please note that in the early years, your mortgage interest deduction will be more than in later years. This is because early on in the life of a home loan, almost your entire mortgage payment is interest. As you own the home for a number of years, the mortgage payment becomes more and more a payment against the principal amount and less interest, but early on in the owning process, your tax deduction can be significant.
So, is it worth it to own a home versus renting a home? Only you can answer that question. Our advice is always to speak to your accountant for exact answers about your tax benefits, and find a real estate agent you trust for an honest discussion of advantages and disadvantages of buying a home.
Sports Relocation, Inc assists players/coaches of all professional sports leagues including the NBA, WNBA, NFL, MLB, NHL, and entertainers relocate nationwide by servicing their Real Estate & Relocation needs. Ikem Chukumerije is licensed to practice real estate in New York, California, Nevada, Florida, & Georgia. Sports Relocation, Inc operates nationwide and provides elite athlete relocation services in all 50 states and internationally.