Did you know that when you purchase a home, you can benefit from tax breaks? Buying your first home is a big step. When you go from renting to purchasing a home, you begin to build equity in real estate. With the very low interest rates right now, some people even save money from their rent payments when they purchase a home. You also save on taxes as you will typically itemize your taxes rather than claiming under standard deduction.
Deducting mortgage interest is the largest tax break you will receive from owning a home when you itemize your taxes. The bulk of your mortgage payment goes to interest – and all of that interest is deductible unless the loan is more than $1 million. You can also claim the property taxes you pay as an income tax deduction which can apply to your principal home and any others you may own. If you move, you can even write off most of your moving costs if you buy a new home that is 50 miles or closer to your job than your old home. However, you must continue to work full time for 39 weeks in the general area during the following year.
Be sure to consult an accountant about your particular situation as there are many tax rules based on this. Now is the time to buy! If you see not only the tax benefits in purchasing a new home but the benefit of fulfilling the American Dream, then now is the time to get pre-approved. At ReeceNichols, we offer a family of services. If you are ready to get pre-approved, visit HomeServices Lending!