Uncle Sam Wants You
Uncle Sam Wants You (to own your home.)
I am always surprised when I meet potential first time home buyers that don’t understand the tax benefits of owning a home. I suppose I shouldn’t be surprised – if understanding income tax filing was easy, there wouldn’t be tax preparation services on every street corner. Everyone’s tax situation is different, and from a Realtor perspective, the only proper advice we can give is to “consult your tax professional.” Well, almost. Here’s a hint for renters. As you file your taxes this year, or even if you’ve already mailed in a short form, take a few minutes to do a “what if” look at what your taxes would have been if you did own your home. Pencil in the itemized deductions page - deducting your annual mortgage interest and property taxes paid every month on an imaginary home you might have owned. Don’t know how? Ask a homeowner (there are plenty of us around – smile.) You may be pleasantly surprised – or maybe not. You need to know! My annual income tax bill is about $4000 a year less because of these deductions alone. That’s over $300 a month less compared to if I was renting (and letting my landlord have the tax benefits!) It may be different for you, depending upon your tax rate. The annual amount of income tax reductions from owning a home can be factored into those monthly house payments verses the rent you are paying. In many cases the rent or buy descion is a “no brainer.”
Now, pure economics is not the only, or even best, consideration in buying a home. There a whole lot of other things to think about. But in this time of tight budgets, it is a real good idea to know the numbers. Spend a little time with a pencil. It is worth it. Visit my web page just for First Time Home Buyers for more considerations.
Also, it must be mentioned that our politicians are looking at revisions of the tax code to reduce our nation’s deficit, including eliminating the tax deductions for mortgage interest paid by homeowners. Not going to happen in my opinion. Looking at the tax code is a good thing – they’ve been talking about simplifying the income tax code for years. The National Association of Realtors is watching, and of course opposing, any changes that would massively affect homeowners. Private ownership of property is one of the wonderful benefits of being an American – it’s an essential part of the American dream that we can never take for granted. That’s not going to change. Uncle Sam wants you —–to own your home (and will allow you some great tax reducing deductions if you do!)
