One of the best ways to cut back the pain from tax return is by owning a home. Even the Tax Policy Center attests to the benefits from having your own home.
The briefing book highlights four benefits that come from home ownership:
Lowered Mortgage Interest
Homeowners have the benefit of deducting incurred interest rates of up to $1 million or home equity balance of up to $100,000.
This is one area where homeowners can be meticulous. They can literally be paid back with benefits.
This advantage is not available to those who are renting a home.
Reduced Property Tax
Another benefit of itemizing tax deductions is the reduction on property taxes. Homeowners can effectively reduce property tax and have a real estate asset after years of payment.
Rent Imputed by Home Ownership
The opportunity to stay in a home without having to pay rent is also considered as an additional benefit.
This is not formally part of taxable income.
But it remains as a palpable benefit for people who own homes.
In addition, homeowners can earn from renting out a portion or the entire space later.
Home Sale Gains
Up to $250,000 (single) and $500,000 (joint) capital gains tax can be diminished by homeowners.
There are fairly easy requirements to get this benefit on capital gains.
The homeowner must have lived in the property for at least 2 years out of the recent 5 years during the time of application.
These trends make home buying prospects for 2017 very attractive.
We’re not suggesting that you buy a house in order to save on your taxes. But if you’re undecided to whether 2017 is the year you should become a homeowner, this information can help you make that decision.
At Burgess Group Realty LLC, we help our clients who decided to become homeowners find the best deal on the market. We can help you find the right home just for you.
CALL Catherine at 303.506.5669.