Owning a home is at the top of most people’s list of life goals, and with all the benefits, it’s easy to see why. From the pride that comes from owning something that is truly yours to building equity in your home to the stability of having a set mortgage, owning a home has many positive attributes. And best of all, owning a home may mean receiving additional tax benefits.
Homeownership can have many potential income tax advantages, including deductibility of property taxes and home mortgage interest (for taxpayers who itemize deductions) and exclusion of up to $250,000 of gain on sale ($500,000 for married couples filing jointly) if certain ownership and use qualifications are met. The particular tax results will vary according to each buyer’s personal circumstances, so it is important that you consult with your own tax advisor regarding these tax benefits.
Some good sources for information about the tax consequences of homeownership are the IRS publications on the subject, including Publication 530 “Tax Information for Homeowners”, Publication 936 “Home Mortgage Interest Deduction”, Publication 523 “Selling Your Home” and Publication 527 “Residential Rental Property (Including Rental of Vacation Homes).” These can be accessed at http://www.irs.gov/app/picklist/list/publicationsNoticesPdf.html.
I recommend that you consult with your own tax advisor and do your own research regarding the tax benefits of homeownership since benefits will vary depending on your personal situation and circumstances.
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