Owning a home offers a myriad benefits throughout the year, but some of the financial advantages of home ownership are most apparent at tax time. As many of today’s hard-working American families are feeling a financial squeeze, the tax benefits that can come from owning a home can be a welcome relief. A number of tax deductions and credits are still available for home owners; these include deductions (with specific limits) for mortgage interest and capital gains on home sales, and credits for certain energy-efficient home improvements. Even with these benefits, home owners pay 80-90 percent of all U.S. federal income taxes.
It’s been suggested that many of today’s tax incentives for home ownership primarily benefit wealthy individuals, but that’s simply not true! As today’s public debate continues about what home ownership means for families, communities, and the nation’s economy, there’s no question that for many, owning a home is still the best way to begin building wealth.
Ninety-one percent of home owners who claim the mortgage interest deduction earn less than $200,000 a year, and the ability to deduct the interest paid on a mortgage can mean significant savings at tax time. For example, a family who bought a home in 2011 with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4.5 percent, could save nearly $3,500 in federal taxes when they file this year.
REALTORS® see the very real positive impact of home ownership every day with their clients. Recent proposals to reduce or eliminate the mortgage interest deduction and remove government support of the housing finance market, could have disastrous consequences for the economy, not to mention making it harder or nearly impossible for millions of families to own their own homes. REALTORS® believe America must continue to invest in home ownership, for the future of our families and our nation.
For tax tips visit www.HouseLogic.com. This website is a free source of information from the National Association of Realtors® that helps home owners maintain and enhance the value of their homes and engage in issues that affect their local communities.
As always, thank you for making 2FindYourHome and 2FindYourHome.com the preferred print and online resource in Western New York. Don’t forget to visit our website for all of the latest Open House information before you head out this weekend. Remember, Realtors® bring people Home. Have a great weekend.
John B. Leonardi, RCE
CEO, Buffalo Niagara Association of REALTORS®, WNY Real Estate Information Services, LLC
200 John James Audubon Parkway , Suite 201, Amherst, New York 14228 ph 716.636.3699 • fax 716-636.9121 • www.bnar.org