How Taxes Affect Home Ownership

It's a house, it's a home, it's a tax deduction! Seriously, come tax time you'll think your home is a superhero! Home ownership is a great financial investment. Most homeowners experience tax savings and often find that their home is their biggest single deduction. Definitely something to consider when you're in the market to buy a home!

Granted, property taxes will add to your monthly mortgage payment. (Ask your home mortgage consultant or contact your local tax office to find out what the average cost of property taxes is in your new neighborhood.)

But the good news is property taxes are one of several deductions you may be able to claim. And unless your home-related deductions (plus other itemized deductions) don't add up to the standard deduction for your filing status, you should be able to save at least some money on your annual income tax bill.

Whether you're eligible for all or some of these deductions, and the amount you'll save, depends on your filing status, your taxable income, your itemized deductions and more. Speak with your tax advisor for information specific to you.

Home-related deductions may include:

• Mortgage interest. (Can deduct yearly.)
• Property taxes. (Can deduct yearly.)
• Points paid at closing (either by you or by the seller). (Can only deduct for the year you buy your home.)

Note that you cannot deduct any fees or costs for getting a mortgage loan.

Your tax advisor can provide additional information about the tax ramifications of home ownership.