| Owning a home has many benefits, especially in the | | | | loans, which in the end, turns out to be thousands of |
| world of taxes. From points, to interest, to real estate | | | | dollars. Refinanced mortgage points are also |
| tax breaks, the government finds a multitude of ways | | | | deductible, provided they are amortized over the life of |
| to make owning a home an advantage during tax time. | | | | the loan. Homeowners who refinance can write off |
| Property Tax Advantage | | | | the balance of the old points and start to pay off the |
| Property taxes, otherwise known as real estate taxes, | | | | new. |
| are fully deductible. | | | | Home Equity Advantage |
| Mortgage advantage | | | | If you take out a loan to make considerable home |
| The most notable tax break is that all mortgage | | | | improvements, you can deduct the interest on this loan. |
| interest, up to a maximum of $1 million dollars, can be | | | | There is no dollar limit on this deduction; nonetheless, |
| deducted on your taxes. If you are married taxpayers | | | | the work must improve the value of your home, such |
| filing jointly, make that $500,000. | | | | as a new driveway, an extra room or a pool, and not |
| Interest Advantage | | | | simply be minor cosmetic improvements, such as |
| Your total home equity debt is limited to the smaller of | | | | painting, fixing broken windows or wallpapering. |
| $100,000 (or $50,000 for each member of a married | | | | There are also many tax advantages after the initial |
| couple if they file separately), or the total of your | | | | purchase of your home, such as using a room for a |
| home's fair market value, less certain other outstanding | | | | home business, capital gains, selling, capital |
| debts against it. | | | | improvements, moving costs, and other home owning |
| Point Advantage | | | | tax advantages. Consult a professional to educate |
| You can fully deduct points associated with a home | | | | yourself further and learn in-depth about your specific |
| purchase mortgage. A point equals 1% of the loan | | | | tax situation. If you own your home, there are many |
| principal. One to three points are common on home | | | | tax advantages that can be afforded to you. |