Rent Vs. Buy–Tax Benefits Win Out!
When you consider buying a home, thinking about the tax deduction makes it a winning move. The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership.
Consider This As You Consider Buying a Home:
On a $150,000 Loan for 30 Years, at 5 percent interest:
$7,500 = Mortgage interest paid
Property Taxes at 1.29 percent on $175,000 Assessed Value for taxes:
$2,258 = Property taxes
______
$9,758 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 9,758 x 0.28 = $2,732.24
$2,732.24 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Lowering your taxes means money in your pocket! Thats over $225 per month.
Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level. Information from Realtor.Org.
