What home buying expenses are tax deductible?
What home buying expenses are tax deductible?
Joseph Bradley
Joseph Bradley
Here are some of the common ones:
The interest you pay on your mortgage loan may be tax deductible, up to certain limits. You can deduct the interest paid on a mortgage of up to $750,000 for homes purchased after December 15, 2017, or up to $1 million for homes purchased before that date.
Points are fees paid to a lender to reduce the interest rate on a mortgage loan. In most cases, points paid at the time of closing are tax deductible in the year they are paid.
Property taxes paid on a primary residence may be tax deductible. The Tax Cuts and Jobs Act (TCJA) limits the total deduction for state and local taxes (including property taxes) to $10,000 per year.
If you use a portion of your home as a home office, you may be eligible for a deduction for certain expenses related to that space, such as utilities, insurance, and repairs.
If you make energy-efficient upgrades to your home, such as installing solar panels or energy-efficient windows, you may be eligible for a tax credit. The credit is typically a percentage of the cost of the upgrades and is subject to certain limits.
It is important to note that the rules for deducting home buying expenses can be complex and may depend on a variety of factors, such as the size of the loan, the location of the property, and the year the home was purchased. It is a good idea and recommended to consult with a tax professional to determine which home buying expenses are tax deductible in your situation.
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