| You are probably like most first time home buyers; | | | | First time home buyers should read IRS publication 530, |
| you've listened to your friends and family's advice, | | | | it contains a lot of valuable tax information those that |
| most of which is usually to encourage you to purchase | | | | are purchasing a home for the first time. Property |
| a home. Having cold feet is very normal. Prior to | | | | taxes paid for a first house and also for a vacation |
| purchasing their first home many people wonder if it is | | | | home are totally deductible on your income taxes. As |
| the correct thing to do. Relax. This is fear is normal as | | | | a matter of fact in California proposition 13 established |
| well. Learning why you should buy a home makes the | | | | the amount of assessed value after property is |
| process much less frightening. Below are some very | | | | exchanged. Limited property tax rises to 2% per year |
| good reasons why you should buy a home. | | | | or the current rate of inflation. |
| Pride of owning your home | | | | Exclusion of capital gains |
| The pride of owning your own home is the primary | | | | If you have lived in your house for two of the previous |
| reason people want to own a home of their own. This | | | | five years you are allowed to exclude up to $250,000 |
| means you can decorate and paint your walls anyway | | | | for an individual or $500,000 for a married couple of |
| you want, you can crank up the radio and best of all | | | | profit from capital gains. It is not necessary to buy a |
| you can make your house your home. Owning your | | | | new home or purchase a large house. Age restrictions |
| home ensures both you and your family a great sense | | | | do not apply and the "over-55" rule does not apply |
| of security and stability. Home ownership is an | | | | either. You are allowed to exclude these thresholds |
| important investment in your future. | | | | from taxes every 2 years. This means that you could |
| Value Appreciation | | | | sell your home every 24 months and keep your profit. |
| It is no secret to anyone that the real estate market is | | | | This would be subject to some limitations but free |
| unpredictable. The past few years have been | | | | from taxation. |
| obviously quite turbulent. But despite the current | | | | Equity |
| tumultuous market real estate has consistently | | | | People that carry credit card balances are not allowed |
| appreciated. A home to many people is seen as an | | | | to deduct interest paid. This can cost you as much as |
| investment and some security against inflation. | | | | 18% to 22%. The interest in an equity loan usually |
| Deducting mortgage interests | | | | much less and it's deductible. Many home owners |
| Owning a home is an excellent tax shelter and our tax | | | | believe it makes complete sense to pay off this type |
| rates greatly favor the homeowner. Assuming you | | | | of debt with a home equity loan. You can borrow |
| mortgage balance is not higher than the price of your | | | | against your homes equity for a slew of reasons. |
| house, mortgage interest is completely deductible. The | | | | Home improvement, college tuition, medical expenses |
| largest component of your mortgage payment is the | | | | are but a few of these reasons. You should however |
| interest. | | | | read your states laws regarding home equity loans as |
| Deducting property taxes | | | | they do vary and can come with some restrictions. |