By: Richard G. Varner, P.A.
The federal government really wants you to own a home. Using the tax code, they give us wonderful incentives to make the American dream a reality. The median sales price in 32828 is currently $172,000. Based on that figure and today interest rates, your principal and interest payments would be roughly $800. Add taxes, insurance and HOA fees and your total payment will likely be somewhere around $1200. Homeownership is already very affordable compared to current rental rates, but throw the available tax benefits on top of that and you are all out of reasons to wait any longer! Here are a few of the tax advantages you will want to ask your accountant about:
1). Mortgage Interest Deductions – This is the big one! In the example above, the principal and interest payments on a home priced at the median would be around $800. In the first several years of purchasing your home, a majority of that is interest. You’ll pay roughly $7,000 in interest in the first year. All of which is deductible! A person in a 25% tax bracket will save $1,750 on their tax bill!
2). Real Estate Taxes – Another big part of your monthly mortgage payment is real estate taxes. The amount will vary based on the home and it’s location, but I guarantee you will enjoy the savings in April!
3). Mortgage Points – Did you buy down your interest rate? Or have to pay points to get your loan? Deductible!
4). Capital Gains – As long as you owned and occupied the home as your primary residence, you can sell your home at a profit and not pay ANY taxes on the capital gain! You can do this once every two years up to $250,000 for a single homeowner and $500,000 for married homeowners. That’s a potential savings of up to $125,000.
If you are already a proud homeowner, ask your tax professional about these and other great ways to save money on your tax return. If you are currently renting, ask a local Realtor how you can put yourself on a track toward home ownership today!
Richard Varner, P.A. is a licensed REALTOR who grew up in Orlando, graduated from UCF, and currently resides in Avalon Park with his wife Jill and daughter Kinsley. He leads The Varner Group, a Thomas Lynne Properties company and enjoys helping buyer and sellers achieve their real estate goals by providing excellent customer service and expert advice. You can learn more about Richard and his company at www.TheVarnerGroup.com
