Tax incentives for homeowners can sweeten deal for buyers
Of the many advantages granted to homeowners, one of the most popular is the list of tax breaks they receive. As a new homeowner, you may be able to deduct some of the costs related to your purchase if you itemize your deductions rather than use the standard deduction when filing taxes.
These costs can include mortgage interest, real estate taxes and private mortgage insurance premiums you’ve paid.
While the IRS can best explain what you can and cannot deduct, your Realtor can answer your initial questions about tax incentives during your home-buying process.
Here’s a closer look at some of the deductions that might apply to your situation. Mortgage-interest deduction
If you took out a loan to purchase your home, you may be able to deduct from your taxable income the amount you paid in interest on your mortgage. This mortgage-interest deduction is especially valuable for new homeowners since the majority of your monthly mortgage payment will go toward paying the interest on your loan for the first few years. Your lender will send you a Form
1098 that lists how much you paid in interest. Real estate taxes
If you paid real estate taxes assessed on your property to a local or state taxing authority such as a water district, city, county or school district, you may be able to deduct this cost. This information also will be on the Form 1098 from your lender. Private mortgage insurance
If you made a down payment of less than 20 percent of the purchase price on your home, you probably are paying private mortgage insurance.
But you may be able to deduct some of the money you paid for these PMI premiums, if you meet certain qualifications. This amount will be listed on the Form 1098 from your lender. Let the record show
Keeping accurate records is important for properly reporting your deductions as a homeowner. The IRS recommends keeping your purchase contract and settlement papers and any paperwork such as receipts or canceled checks. Staying organized will save time when you sit down to file your taxes, and it’s good to keep your paperwork handy in case you’re audited.
Just remember that everyone’s situation is different, so the best way to determine what will apply to you is by consulting a tax professional who can help you find out what items are deductible.
To learn more about buying or selling homes in Texas, visit the all-new HAR.com.
Nancy Furst of Berkshire Hathaway HomeServices Anderson Properties is the 2015 chair of the Houston Association of Realtors.
Builders say that vaulted ceilings are coming back in style, but they’re saying “farewell” to fancy jet-tubs in the bedroom.
We instantly fell in love with a newly built home in a housing tract that’s under construction. The only thing that worries us are the vaulted, 14-foot-tall ceilings in the living room and two of the three bedrooms. Wouldn’t those high ceilings make it very expensive to heat or cool the home? Not necessarily. Most new homes, especially those with vaulted ceilings, use extra-heavy-duty insulation and other energy-saving tools to keep heating and cooling bills as low as possible.
Ceilings 9 feet tall or more are making a comeback in new housing developments this year, builders said in a recent survey conducted by the National Association of Home Builders. Other relatively new additions to the most-popular-amenities list include energy-efficient windows and appliances, programmable thermostats and a guest room that can be transformed into a family room or even a spare kitchen.
Walk-in closets in the master bedroom, two-car garages and granite counterparts — all of them old standbys — once again made the most-popular list.
What features are on the decline? Builders say they include elaborate outdoor cooking areas, outside fireplaces, and foyers and living rooms that have two stories. Sunrooms and laminate countertops aren’t “hip” among most new-home buyers anymore either, developers say.
Nor are whirlpool tubs in the master bedroom or carpeting on a two-story home’s main level.