| HOME
> INVESTORS / BUYERS
> HOME BUYING ARTICLES > ARTICLE
1.2
BENEFITS
OF OWNING YOUR OWN HOME
Income
tax savings
Because of income
tax deductions, the government is basically subsidizing your purchase
of a home. All of the interest and property taxes you pay in a given
year can be deducted from your gross income to reduce your taxable
income.
For example,
assume your initial loan balance is $150,000 with an interest rate
of eight percent. During the first year you would pay $9969.27 in
interest. If your first payment is January 1st, your taxable income
would be almost $10,000 less – due to the IRS interest rate deduction.
Property taxes
are deductible, too. Whatever property taxes you pay in a given
year may also be deducted from your gross income, lowering your
tax obligation.
|
