What tax advantages are there for owning a home?
• Income tax reduction. During the first few years of a mortgage, most of your monthly payment covers interest on the mortgage. In most instances, your mortgage interest and property tax are deductible from your taxable income, lowering your overall tax bill Therefore, your after-tax cost of owning a home may become lower than renting. If you later sell the home at a profit there may be tax implications. See your tax advisor for more information. • Tax deductible borrowing power. As your home equity increases, you may borrow against it for most needs with a home equity loan or line of credit. Because your home equity loan or line of credit is backed by the equity in your home, you may have the ability to deduct that interest from your taxable income. This could lower your final tax bill. Consult a tax professional for complete details.
