Monday, November 17, 2008

Tax Benefits of Home Ownership

Loan discount points and origination fees are tax deductible to a home buyer.

Real estate taxes paid on the residence are tax deductible.

You can deduct mortgage interest on your tax return. In the early years of a mortgage, most of your monthly payment is interest, so this can be significant. If a taxpayer is in the 28% tax bracket, this can have the effect of lowering the cost of borrowing by almost one third.

Interest paid on an additional $100,000 home equity loan is tax deductible. Many homeowners use equity loans to absorb high interest, non-deductible credit card debt.

When you sell your principal residence, and you have owned and occupied this residence for at least 2 of the last five years, you can exclude up to $250,000 ($500,000 if married) gains from taxes. This can be done as often as every two years.

Dan Rich
Vesey & Company, P.C.
185 Centre Street, Suite 103
Danvers, MA 01923
978-774-3000 ph
978-774-8170 fx

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