June Is National Homeownership🏡🗝️ Month: Reason #7 To Own, Not Rent

JUNE IS NATIONAL HOMEOWNERSHIP MONTH 🏡🗝️

REASON #7 TO OWN A HOME, NOT RENT

OWNING A HOME PROVIDES TAX BENEFITS YOU DON'T GET WHEN YOU RENT

The Tax Advantages of Homeownership: Reason #7 To Own, Not Rent

Buying a home is more than just putting down roots—it's a strategic financial decision. Among the many advantages, Reason #7 to own a home is the wide array of tax benefits that renters simply don’t enjoy. And let’s face it: saving money on taxes is something we all want.

Here are some of the key tax perks that come with owning a home:

• Mortgage Interest Deduction
  One of the biggest tax breaks for homeowners is the ability to deduct the interest paid on the mortgage. This can result in significant savings, especially in the early years of a loan when the bulk of monthly payments go toward interest. This deduction can significantly reduce taxable income and is a key part of Reason #7 to own a home.

• Home Equity Line of Credit (HELOC)
  If you’ve taken out a HELOC for home improvements or other qualified expenses, the interest paid on that loan may also be tax deductible—offering another potential way to reduce taxable income. This added flexibility and tax efficiency reinforce Reason #7 to own a home.

• Mortgage Points
  If you paid “points” to reduce your mortgage interest rate when you purchased your home, you may be able to deduct those points on your taxes—typically in the year they were paid—yet another angle to Reason #7 to own a home.

• Property Tax Deduction
  Homeowners can deduct state and local property taxes on their federal income tax returns, up to the IRS limit. This ongoing annual deduction is a straightforward example of Reason #7 to own a home, offering consistent savings year after year.

• Capital Gains Exclusion on Home Sale
  If you sell your primary residence, the IRS allows you to exclude up to $250,000 in profit if you’re single—and up to $500,000 if you’re married filing jointly—from capital gains taxes, provided you meet ownership and residency requirements. Additionally, many of the costs associated with selling your home (like commissions and improvements made before the sale) can reduce your taxable gain. This powerful tax exemption makes a compelling case for Reason #7 to own a home.

• Home Office Deduction
  Work from home? If you use part of your house regularly and exclusively for business purposes, you may qualify for a home office deduction—allowing you to write off a portion of your mortgage interest, utilities, insurance, and more. It's a modern financial perk that strengthens Reason #7 to own a home.

• Home Improvement Loan Interest
  While general home improvements aren’t directly tax deductible, the interest on loans used to fund qualified renovations or additions—such as a new roof or kitchen remodel—may be deductible, depending on the loan structure and use of funds. When financed strategically, even upgrades support Reason #7 to own a home by adding tax-deductible potential.

• Penalty-Free IRA Withdrawals
  First-time homebuyers—or those who haven’t owned a home in the past two years—can withdraw up to $10,000 from a traditional IRA for a home purchase without incurring the 10% early withdrawal penalty. This can be a valuable source of funds when buying your first home. This can make a significant difference when budgeting for a down payment and serves as a financial motivator in Reason #7 to own a home.

• Lower Tax Withholding
  You don’t have to wait until tax season to reap the rewards of homeownership. As a homeowner, you can adjust your W-4 with your employer to reduce the amount of tax withheld from your paycheck. This means you benefit from your deductions immediately—yet another practical example of Reason #7 to own a home.

   

Bottom Line:
Homeownership isn't just a smart investment in your future—it also comes with a variety of tax benefits that can help reduce your annual tax burden and increase your financial flexibility. If you're considering buying a home, be sure to explore how these tax breaks could work in your favor.

As always, it's important to check with your personal accountant to make certain what tax benefits will apply to you specifically when you purchase, own, or sell a home. And you can find more information about tax deductions for homeowners here.

If you're a renter, who would like to make the transition from renter to homeowner, contact Nina Hollander with Coldwell Banker Realty.

I can help you turn your rent payments into mortgage payments!

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Originally posted on www.GreatHomesInCharlotte.com