Besides the wealth accumulation that property appreciation affords, tax breaks are another way homeowners benefit from their real estate investments.  Here are some facts that set the record straight on the tax advantages of homeownership:

  1. Mortgage Interest:  Homeowners with a mortgage that went into effect before December 15, 2017, can deduct interest on loans up to $1 million.  For mortgages that went into effect after that date, only the interest on the first $750,000 is a legitimate deduction. To be able to take this deduction, you must itemize.  Most Californians will benefit from this deduction because the majority of itemize deductions will most likely exceed the standard deduction of $24,400 for a married couple, or $12,200 for an individual.
  2. Property Taxes:  This deduction is capped at $10,000 for those married filing jointly no matter how high the taxes are.  Remember that your taxes may be part of the total payment you pay to your lender.
  3. Private Mortgage Insurance:  If you put less than 20% down on your home, you are probably paying private mortgage insurance (PMI).  This can cost from 0.3% to 1.15% of your home loan. Good news: you can deduct this interest payment thanks to the Mortgage Insurance Tax Deduction Act of 2019.  This credit is retroactive for 2018, so it is a good idea to speak to your accountant to see if it makes sense to amend your 2018 tax return.

There are many reasons owning a home makes sense, but the tax benefits have always been a major motivator.  The renter’s deduction is a pittance compared to the tax write-off you can claim as a homeowner when you consider both mortgage interest and property taxes.

Hope you’ve found this useful.

Keep reading here!

Best, Forest – The Guy in the White Hat
Hard Money Broker and Co-Owner of family owned and operated Sun Pacific Mortgage & Real Estate, serving all of California since 1988! 707-523-2099   www.sunpacificmortgage.com
CA DRE license #010005559 and NMLS #289456


Note:
  Get our financing despite bad credit, difficult to prove income, property a fixer, etc.!  We finance Jumbo loans, Bridge and short-term loans, Owner Occupied purchases and refinances, investment purchases and commercial.

The content of this blog contains general advice only and does not consider individual financial circumstances, desired loan amounts or existing real estate or lending transactions. This information is intended for licensed Real Estate Agents and licensed Lenders/Mortgage Brokers and is posted on our company website and specific blog sites with the express purpose of reaching such licensed individuals.

Views: 6

Comment

You need to be a member of Real Estate Finance to add comments!

Join Real Estate Finance

© 2024   Created by Admin.   Powered by

Badges  |  Report an Issue  |  Terms of Service