Tax Benefits of Owning a Home

By Real Estate March 3, 2017
tax benefits of home ownership

Tax Benefits of Owning a Home

Home ownership confers multiple tax-related benefits which should be maximized to the full extent possible. The following article provides an excellent primer for those who currently own a home or are considering purchasing a home as one’s primary residence. There are other tax benefits and strategies for investment properties but those aren’t the focus of this current article.

Tax Deductions

For starters, one can deduct the interest on a loan that does not exceed $1 million. Points to reduce one’s interest rate are typically deductible as well. In addition, the interest on a second mortgage in the form of a home equity line of credit (heloc) is usually deductible as long as the loan doesn’t exceed $100,000.  According to the article, private mortgage insurance (PMI) is also deductible but only if your income is under $109,000 a year. That said, there are products out there allowing for a lower down payment (under 20%) without the PMI requirement. The other main deduction home owners benefit from is property taxes. The article also touches upon the $250,000/$500,000 exclusion upon the sale of your home, determining your home’s cost basis, and other rules governing this important exclusion.

Contact your CPA

This article is for informational purposes only. Always be sure to check with your CPA to get specific tax-related information that relates to your personal situation. If you don’t have a CPA or a go-to tax professional, the KASA Real Estate team can help. We work with a highly qualified CPA, Ted Grandbois, who provides free tax consultations by phone. Check out Ted’s bio here: KASA TEAM. Contact us and we’ll be sure to set up a call for you.

Read the full article here:  How owning or selling a home affects your taxes

About the Author
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Adam Ettenson, Broker / Owner

Adam’s real estate experience encompasses residential sales, renovations, real estate development, property and asset management, and multifamily investment acquisitions. He has helped countless clients buy and sell property throughout the Bay Area, including in San Francisco, Marin County, Alameda County, San Mateo County, and Santa Clara County. He has overseen the condo conversion and major renovation of a two-unit building, and has worked on several affordable housing residential development projects with budgets exceeding $20 million, helping low-income families secure safe, affordable housing. He is currently working on a project that entails adding a condo unit to an existing building as well as a major horizontal expansion and renovation, increasing the total square footage to approximately 1500 square feet. Prior to working in real estate, Adam practiced immigration law and real estate law. His extensive background as an attorney and his broad real estate experience allow him to faithfully advance his clients’ interests in both the purchase and sale of real estate. Adam’s clients benefit from strong negotiation skills, contractual expertise, and deep knowledge of local rules and regulations.