The Tax Advantages of Homeownership

Los Angeles and South Bay Real Estate Video Blog with Lenny LaRocca

There are many tax benefits that homeowners get to take advantage of. I’ll cover a few that you should know about today.

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There are many tax advantages that come with homeownership. We helped a record number of new homeowners this year, so we want you to know which tax deductions are available to you. By all means, please talk with your tax adviser before you actually handle these deductions on your annual return. 1. Mortgage interest: You can deduct the total amount of interest paid every year against your taxes. 2. The cost of your loan or loan points: You can deduct the cost of your loan or the points that you paid for that home loan against your current year tax return. In other words, those are 100% deductible in the year you actually bought the home. 3. Deductions for a home equity line of credit: If you take out a home equity line of credit to transfer some of your credit card debt and get a lower interest rate, then you can deduct that interest rate on your home equity line of credit. You cannot deduct the interest rate if it’s on your credit card. If you take out a home equity line of credit in order to make a substantial improvement to your home, you are also able to deduct the interest to the money used against your home equity line of credit. Remember, there are some limits on the deduction amounts for your home equity line of credit. The benchmark for couples is around $100,000 if they file together, and $50,000 when filing individually. That is a lot of interest that you can balance off of your taxes. 4. Property taxes: You can write off 100% of your property taxes. That includes both state and federal property taxes.

Your property taxes are 100% deductible.

There are a few other notable deductions that you may qualify for. Ask your tax adviser for more information about:

• Home office deduction
• Selling cost deduction
• Capital gains exclusion
• Moving costs (if you are relocating because of your job)

Again, check with your tax adviser before you try to take advantage of any of these deductions so that you know exactly what you are getting into.

If you have any other questions about the benefits of homeownership, tax or otherwise, just give us a call or send us an email. We would be happy to help you!