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Advantages of Home Ownership

Tax Advantages

  • Taxes and interest: Homeowners can deduct property taxes and interest paid on the mortgage. You may also deduct interest paid on your second mortgage if the total of your first and second mortgages is not greater than the allowed amount.
  • Equity: The equity built up in your home is not taxable until the sale of your property, similar to a tax-deferred savings plan. You may also borrow money against the equity in your property to upgrade your property, purchase a car, pay for education, and have the ability to deduct the interest from your federal taxes.
  • Deferred Capital Gains: When you sell your home, capital gains can be deferred if you buy, build or improve another home of similar value within a certain time frame.
  • Closing Costs: Points actually paid and some other fees incurred in the cost of obtaining a mortgage are tax-deductible.
  • Elderly Exclusion: A once-in- a-lifetime exclusion is available if you are 55 years or older. You can be exempt for up to an allowed amount of capital gains on the sale of your primary residence.

Personal Benefits

  • Freedom: You choose the style of the structure, landscaping, colors, furniture and decor. Since you are the “Landlord,” the freedom to arrange or rearrange things to suit your needs is limited only by your creativity and imagination.
  • Privacy: Your home is the place where you can enjoy the many facets of your lifestyle. It can be a center of activity or a quiet refuge. It’s much more than a place to eat and sleep; your home is an integral part of your lifestyle.
  • Security: Security and knowledge go hand in hand with home ownership. Your feeling of security will be enhanced by the knowledge that your home, a major investment of a lifetime, is a safeguard against inflation. As time passes, a smaller share of your earnings will go toward this housing expense. Owning a home is the beginning of financial independence.
  • Community: You establish roots because your home makes you a part of the community. Your neighbors are homeowners too; often with backgrounds much like your own.

The primary benefit of becoming a homeowner is the opportunity to build equity. You can expect the value of your home to appreciate steadily during the time in which you live in it. Home ownership is also the best hedge against inflation.