Tax Benefits of Owning a Home

Real Estate Agent with The Bean Group

 Buying a home is often the largest investment you will ever make.  This process generally involves a loan with complicated paperwork and possibly other obstacles and other hoops you'll have to jump through along the way.  Is all this effort really worth it? Absolutely!!  There are many reasons you may want to purchase a home but there are also a few tax benefits you may not be aware of as well.  These tax advantages, can help reduce your costs and leave you with more money when you sell.  Here are a few of those benefits:


1.  Mortgage Interest - This interest is tax deductable on a maximum of $1 million in mortgage debt.  You may also deduct the interest on other debt up to $100,000 which uses your home as security such as a home equity loan.

2.  Points - When you apply for a loan, your mortgage lender will charge you a variety of fees.  You may choose to pay "points" or a "loan origination fee".  These fees are calculated at 1% of the loan principal and buyers typically pay one to three points.  The cost of points can be fully deducted when purchasing a home.

3.  Property Taxes - Real estate taxes may also be deducted from your income.  This applies to your principal home and any second home you may own.

4.  Capital Gain/Profit - Usually profits from the sale of a home are taxed and are known as a "capital gain".  Thanks to the Taxpayer Relief Act of 1997, married homeowners are allowed to exclude up to $500,000 in profit from the sale of their principle residence and single homeowners can exclude $250,000.  You can file for this capital gain exclusion every two years, as long as the property you sold is your principle residence and has been for the past two of the past five years.  Partial exemptions can be made if you owned your home for one year.

For more information on the tax benefits of owning a home you can check out IRS Publication 936 which is entitled "Home Mortgage Interest Deduction".  This publication can be found at or ask the person who does your taxes if they happen to have a copy. 

home buyers Portsmouth NHDeciding to purchase a home can be a difficult decision but the benefits mentioned above were created as incentives for us all to get out there and realize the American Dream of home ownership. 

If you are considering a home purchase in the Seacoast of New Hampshire or in Southern Maine in the near future and want to get even more information about buying a home, check out and we'd be happy to provide you all of the information you might need to realize the dream of homeownership! 

Sue Melhorn
RE/MAX Coast to Coast
Portsmouth NH
1-888-349-5678 x 3818

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Sue Melhorn                                                                                                    Re/Max Coast to Coast

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Cell: 603-944-0186                                                                                                                 Fax:  866-431-1298E-Mail:  

Oh by the way...if you know of someone looking to buy or sell a home, give me a call or drop me an email.  I'm never to busy for any of your referrals!!


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Karen Monsour
Coldwell Banker Fort Lauderdale Beach - Fort Lauderdale, FL
REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!
Great information. I have been trying to explain this whole situation to one of my buyers. They just don't seem to understand...
Nov 16, 2007 12:41 PM #1
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs
Nice blog and this is a huge factor in owning a home or a condo. You did it well. I find very few new home buyers know these things. I am going to bookmark this and use this as a frame work for one of my websites. You could not have said it better. Thanks Eric
Nov 16, 2007 12:53 PM #2
Sue Melhorn
The Bean Group - Dover, NH
Dover, NH Realtor

Eric and Karen....thank you for posting!  I truly think its a great time to buy and feel its important to let everyone know of the advantages. 

Eric...I'm happy to be the framework for one of your websites.  Good luck with that.

Karen...good luck with your buyers.  I'm sure you'll help them come around!

Nov 16, 2007 01:37 PM #3
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate
Sue - Certainly great reasons on why home ownership is important! I just noticed you cover the Sea Coast of Main as well as NH. My parents have a small cottage in York Beach. I have been going there since I was a kid. I absolutely love it there in the summer time. I make it down to Portsmouth a few times in the summer as well!
Dec 29, 2007 01:34 AM #4
Sue Melhorn
The Bean Group - Dover, NH
Dover, NH Realtor

I do cover the Seacoast of Maine as well as Southern New Hampshire.  I lived in York and in Kittery, ME for quite a few years so it made sense to get licensed in both states.

Where is your parents cottage on York Beach?  My grandparents had a place right on the ocean in York four houses south of the bath house.  Sold it in 1979 for $79,000...can you imagine what that goes for now?

Thanks for posting!

Dec 29, 2007 01:41 AM #5
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Sue Melhorn

Dover, NH Realtor
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