Tax Benefits
of Home Ownership
The tax deductions you can take for mortgage interest and property taxes greatly
increase the financial benefits of home ownership. Here’s how it works.
Assume:
(a loan of $150,000 for 30 years, at 7 percent,
using year-five interest)
$9,877 = Mortgage interest paid
$2,700 = Property taxes (at 1.5 percent on $180,000
assessed value
______
$12,577 = Total deduction
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax
rate) (12,577 X .28 = $3,521.56)
Note that mortgage interest may not be deductible on loans over $1.1 million.
In addition, deductions are decreased when total income reaches a certain level. |
