Tax Benefits of Buying a Home

Published on July 5, 2021 by Smith Marketing

Thinking of buying a home? If this is your first time, you may not be aware of all the tax benefits that come from buying a house. There are plenty of tax benefits, along with the other financial benefits of homeownership. You can stop paying rent and start making your monthly payments count toward your own financial goals. Work with a reliable real estate agent in Greensboro who can help you find a home that meets your requirements and price range before the year is out. Your real estate agent can also help with some of the financial matters that go along with buying a home. Once the process is complete, the benefits will come when you file your taxes for the year.

Tax Deductions Homeowners Can Claim:

  • Mortgage interest.You can claim the total amount of mortgage interest you pay each year as a deduction on your taxes. The information you need in order to do this is an IRS 1098 form your lender will automatically send you at the beginning of the year, stating the amount of interest you paid in the previous year. When you close on a home, the partial amount of interest for the closing month will be included in the closing costs. You can claim this amount as a deduction as well.
  • Property taxes. Each year you pay property taxes on your home. This is often paid into an escrow account as part of your monthly mortgage payment, unless you choose to pay the total amount in full out of pocket (most homeowners don’t, as the sum is often large). The amount you pay in property taxes is deductible on your yearly tax filing. Any prepaid taxes you may have reimbursed the seller for during the time you owned the home can be claimed as well.
  • Private Mortgage Insurance (PMI). If you put less than 20% down on the purchase of your home, you are required to purchase mortgage insurance, which can also be deducted from your taxes.
  • You can pay points to your lender when you first finance a home and also when you refinance a home. Points help to reduce your interest rate. If you pay for points at any time during the closing or even if you take out a home equity loan on your home, points can be a deduction.

Find a Real Estate Agent in Greensboro and Take Advantage of these Tax Benefits This Year

There is still time left in 2018 to purchase a home. If you want to experience these tax breaks when you file your 2018 taxes, you simply need to close on a home before the end of the year. The solid team of real estate agents in Greensboro at Smith Marketing can help you find a new home that will meet your needs. Contact Smith Marketing and Allen Tate Realtors® today to start the process. With an extensive online listing database of all the homes available in your desired area, you can filter homes by specific search criteria so you can find what you’re looking for in the shortest amount of time. Call today: (336) 215-7880.