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 $200,000 with an interest rate of seven percent. During the first year you would pay $$13,935.64 in interest. If your first payment is January 1st, your taxable income would be almost $14,000 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. |
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| Stable Monthly Housing Costs |
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