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Tax Deductibles When You Buy a Home

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By : Roby Hicks    99 or more times read
We all want to have our own home someday. This is because of the several benefits that home ownership offers. One of them is the pride of having a property to call your own. You can do what you want with it without worrying about a landlord. And aside from that, there are tax incentives we can enjoy. There are also different tax deductibles that we can take advantage of.

Among the terms you need to be familiar with when talking about tax deductibles is the word, point. Point is a term for the origination fee paid when you apply for a mortgage loan. The origination fee is a percentage of the amount you borrowed. One percent is equivalent to one point. Point needs to be used in order for the amount to be deductible.

You need to qualify if you are to deduct the said points. The first condition you need to satisfy is that the points have to be deducted during the same year when the fee was paid. Another condition concerns the security you need to use for the loan. It has to be the house you are living in. Lastly, the amount you borrowed should be used to purchase a house or build it.

Other items are deductible and this includes the interest for the mortgage. The interest can be as much as one million dollars. This includes all types of properties. This can be your primary residence or your secondary residence. However, each type of property has different conditions that need to be satisfied. That is why you need the assistance of an accountant or a financial consultant.

You can also deduct the property taxes. These are fixed charges whenever you buy a house. The amount varies depending on the type of property you are buying and the current tax rate. To get the property tax, you need to multiply the value of the property by the current tax rate.

For most, it is ideal that they compute the property taxes first before they purchase the property. This is important if you want to stay within your budget. Remember that you should include the value of the land as well as the value of the property. An official tax assessor should determine the value of the property. You need to consider the tax exemptions as well.

The moving expenses can also be deducted. You need to qualify if you want to deduct this. First, you need to move closer to your work place, about fifty miles closer. You also need to work full time in that area for a certain period. Even if you are self-employed, you can also deduct such costs. Just make sure that you work within the area as well and that you stay working there for a certain period.

Tax deductibles are just few of the things that you can benefit from when you purchase a property. You need to familiarize the tax deductibles though. Consider all the factors. Some of the factors would be the type of property you are purchasing, the value of the property and the type of financing you are using. Your financial consultant will help you with this.
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