It goes unsaid that home ownership is a major fiscal responsibility, yet a range of valuable tax deductions can save you a lot of money. The government allows a certain number of tax breaks to those who own homes. Your home provides many tax benefits—from when you buy it right on through to when you decide to sell.
- Mortgage interest: The mortgage interest deduction is most advantageous in the early years of a mortgage.
- Mortgage interest credit: The credit is available to low-income people.
- Property taxes: Property taxes are deductible to an extent, while assessments are not deductible.
- Capital improvements and home loans: To be a capital improvement, the change must be a permanent improvement. The interest you pay on home equity loans used to make capital improvements is tax-deductible, though restricted.
- Other tax relief: Mortgage points are fully deductible. Certainq types of energy-efficient appliances offer credits. Home offices can get you a deduction.
The rules and exceptions for the home improvements and deductions can be extensive, but in hindsight, the benefit is not just relief to you but a more attractive, healthier, robust neighborhood for all.
