Owning a home is a great way to invest in your future, but it’s also a great way to invest in your present. There are tons of fantastic tax benefits to home ownership, which means if you play your cards right, you’ll be smiling all the way to the bank.
The Tax Benefits of Home Ownership
Most notably, you get a tax break on mortgage interest. The bulk of your monthly payment ends up going directly to interest, and it’s all deductible (unless, of course, your loan totals more than $1 million).
If you paid points to get a better interest rate, you’ll get to deduct them in the year you paid them—as long as the loan is for your main home. Check with your lender to make sure that your loan meets all of the qualification requirements; if it does, you may be able to deduct points all in one year.
Property tax is also deductible, whether the house is your primary residence or a vacation home.
While this list isn’t intended to be financial advice, and your best bet is to consult with a tax professional, many homeowners are able to reap the tax benefits of home ownership using these deductions.
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