The Taxman Cometh…homeowner benefits

100_0672

As I was out reviewing a property for a client this afternoon I saw the above sign and was reminded that some of the benefits of home ownership come at tax time.

The US Tax Code lets you take deductions for the interest you pay on your mortgage, the property taxes you pay, and some of the costs involved in buying your home. Some buyers even change their withholding deductions to increase their monthly cashflow.

Thanks to the Mortgage Forgiveness Debt Act of 2007, your mortgage insurance is now also deductible. So if you buy a home with less than 20% down with a conventional mortgage you can deduct your PMI (private mortgage insurance) until 2010 if your adjusted gross income is $100,000 or less.

Regardless of short-term ups and downs in the housing market such as we are currently experiencing, housing is historically a solid long-term investment. Whether you pay rent or pay your own mortgage, you need a place to live.  Money paid for rent is money you will never see again, but mortgage payments let you build equity ownership interest in your home in addition to the tax savings.

Unlike rent, fixed rate mortgage payments don’t go up over the years so your relative housing costs may actually decline the longer you own your home, even if property taxes and insurance costs may rise.

Your tax benefits continue even through the sale of your home when that time comes. Usually when you sell an asset you have to pay capital gains on it. Since 1997, when you sell your homestead you get to keep your capital gains tax free up to $250,000 for an individual or $500,000 for a married couple.

Sharlene Hensrud, RE/MAX Results – EmailWebsite

Written By

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

Related Posts

WHY ARTWORK MATTERS IN HOME STAGING

đź–¨ Print Article At Rooms With Style, our team knows that using artwork to highlight the features of a space is integral to the home staging process. Artwork has the...

Weekly real estate market update 5/24/24… more listings coming soon

đź–¨ Print Article When new listings dip as they have this week it can be a concern whether the supply of homes for sale will drop as well, especially when...

Subscribe to Our Newsletter for Market Updates & Mid-Century Modern Listings

Our weekly HomesMSP Update includes current local market information and a curated list of mid-century modern properties for sale, plus posts from an inspector, a lender, a stager, info about neighborhoods, life in the Twin Cities… even recipes!

Hidden

Blog Categories

Archives

Sharon and John Hensrud

About Us

The HomesMSP Team is committed to meeting you where you are and listening… really listening to understand you so we can use our extensive knowledge of the market and local neighborhoods to give you personalized service.