Wednesday, March 18, 2009

Tax Advantages of Homeownership

Owning a home invokes more than a sense of pride and freedom. It is also a long-term investment opportunity. With tax season in full swing, it is a great time to speak to your tax advisor about the tax advantages associated with homeownership.
Some of these benefits include:

  • Reduce your taxable income: On your itemized income tax return, you may be able to deduct mortgage interest payments, property taxes and points paid to lower your loan's interest rate.

  • Take advantage of new tax laws: The recent stimulus package included new tax laws such as an $8,000 tax credit for many first-time buyers, the elimination of a penalty for short sellers with forgiven mortgage debt, and the ability for certain homeowners to contest property taxes.

  • Lower tax on capital gains when you sell: When you sell your home, you will not have to pay federal income tax on capital gains of up to $500,000 for a married couple and $250,000 if you are single. This applies to the sale of a principal residence owned and occupied for at least two of the last five years.
You may also want to register for our "Know When Opportunity is Knocking" seminar taking place in many Weichert offices on Saturday, Mar. 21, at 11:00 a.m. A tax professional will be in attendance to explain the new $8,000 first-time buyer tax credit and speak about the tax benefits that come along with owning a home.

Smitha Ramchandani is a licensed real estate professional at Weichert Realtors' Morristown West, New Jersey office. She is a Certified Buyer Specialist, and a Home Marketing Expert.. You can reach Smitha at: 973-953-7777 Mobile or 973-455-1900 Extension 122 (Office) or online at: or