It’s easy to be concerned by the past negativity that was swirling around in the real estate industry. However, home ownership offers benefits you just can’t get from other forms of investment, regardless of market conditions. In particular, the U.S. tax code makes buying and owning a home a great deal.
First, you can deduct from your income the interest paid on your home mortgage. You may even be able to deduct your loan’s insurance premiums. If you’ve taken out a home equity loan that interest is also usually deductible. As always, check with your accountant for their advice and guidance.
When you sell your principal residence, sales up to $250,000 (or $500,000 for couples) are free from capital gains taxes. While some restrictions apply, you won’t get that kind of bargain on the sale of stocks, bonds, or other investments. Again, check with your accountant for their guidance.
Now to get back to that mortgage interest deduction: it’s almost guaranteed that if you hold a home loan, the interest deduction will help you reach the threshold for claiming all sorts of itemized deduction above and beyond the standard amount allowed. Your accountant can give you all the details.
So just simply owning a home puts you in the happy position of being able to claim myriad other deductions from your taxable income. Real estate agents are not tax advisors like your accountant, but they recognize a good deal when they see one!
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