Home Ownership Provides a Tax Haven

In tax season, thoughts of home ownership weigh heavily on the minds of renters and other prospective homebuyers. Renters are often apprehensive about the financial responsibility of owning a home. The professionals at Coldwell Banker Northwest Group want to remind taxpayers that ownership, rather than renting, offers financial benefits. Below are tax incentives for home ownership, but as always, taxpayers should seek the advice of a financial professional:

• Deductible property taxes and interest. Most homeowners can deduct property taxes and interest paid on their mortgage for each year of ownership.
• Borrowing against equity. Homeowners can borrow against the equity they have built up in their homes. Equity from a home can be used to improve the property, buy a car or pay for education. 
• Real estate tax exemption. Depending on the state, certain real estate tax exemptions apply for homeowners who meet specific criteria. 
• Yearly home appreciation. Although it is not a tax advantage, homes build equity over time. Renters receive no financial return on monthly rental costs.