What Are The Tax Benefits of Owning A Home
                     Top 8 Tax Benefits of Owning A 
Home
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Tax Benefits of Owning A Home
 
Owning a home comes with 
certain tax benefits as you enjoy 
certain tax deductions associated 
with property tax, mortgage 
interest as well as several other 
tax reliefs.
The homeowners leveraging tax 
benefits could save a great 
amount of money paid annually to 
their lenders and government.
 
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Tax Benefits of Owning A 
Home
01 Mortgage Interest Deduction
02 Property Tax Deduction
03 Mortgage Points Deduction
04 Home Office Deduction
Tax Benefits of Owning A 
Home
05 Standard Deduction
06 Energy Efficiency Upgrades 
Deductions
07 Ageing in Place Deductions
08 Tax Benefits on Selling Your 
Home
1. Mortgage Interest Deduction
If you are a homeowner with a mortgage not greater 
         than $750,000, you can have your interest 
deducted on            the loan. This is one of the key 
advantages of owning a      home. You can get a 
huge deduction at tax time. 
The Tax Cuts and Jobs Act (TCJA) has provided this 
much-needed tax relief to the homeowners. Prior to 
TCJA, the deduction used to be $1 million. 
Homeowners also could deduct interest applicable 
on up to $100,000 of home          equity debt, no 
matter how they used their borrowed               
money.
2. Property Tax Deduction
Homeowners can also have their property tax 
deducted    up to $10,000. However, taxes imposed 
on commercial or  rental properties—and property not 
owned by you   can’t be deducted.
There are many ways to claim your property tax 
deduction.
If you use an escrow account with your lender to pay 
taxes, you can see the amount you paid in taxes on 
your IRS    Form 1098—so you can get that deduction 
directly to your taxes.
If you submit your taxes directly to your municipality, 
make sure you have a record of the paid taxes.
 3. Mortgage Points Deduction
Another great tax benefit for a homeowner is the ability to deduct mortgage 
points being paid at closing when they bought the house.
One mortgage point, also known as a discount point, is equivalent to 1% of y
our     borrowed money (loan).
Simply put, the points will be deducted over your loan period rather than in t
he     year you paid them.  For example, if you paid $ 250,000 for your home, 
each point costs you 1% of your home, or $2,500. You will get a deduction as 
you pay off your loan over time.
The Internal Revenue Service has introduced some tests you need to pass to 
get     fully deducted mortgage points you paid them. Therefore, visit the IRS 
website for   getting the entire list of those tests.
4. Home Office Deduction
If you run a home business or work from your 
residence,  
you can be eligible for the home office deduction that 
is  meant for both renters and homeowners.
This tax relief requires you to use some portion of your 
   
home for business purposes and show that your 
property   is a major location of your business.
There are two ways to opt for the deduction—the 
regular method that involves determining the 
percentage of your  property used for commercial 
operations, or the simplified method, which lets you 
deduct $5 per square foot, up to   300 square feet, for 
the commercial use of your property.
5. Standard Deduction
As you look for the available tax deductions while buying a property, it is downright 
         essential to consider the standard deduction by the IRS.
If you opt for the standard deduction, it will be deemed as your consent to get a 
set          amount of money deducted from your taxable income. However, it won’t 
allow you to         itemize your deductions.
Some standard deduction amounts for each 
taxpayer are…
$12,000 for Single$12,000 for $18,000 for Household 
Married Couples Filing Head
Individually
$24,000 for Joint Filing by 
Married Couples
If the deductions you are eligible for as a homeowner are likely to be 
higher than the standard deduction amount, make sure to itemize your 
deductions.
6. Tax Benefits for 
Energy Efficiency 
Upgrades
Tax deductions are also applied to 
energy-efficient devices, such as 
solar panels, wind turbines, and 
other upgrades. This is known as 
the residential energy-efficient 
property credit. The residential 
energy credit makes up 22%-30% 
of the cost of the improvement, 
depending on what year the 
energy upgrades were installed.
7. “Ageing in Place” Deductions
Aging in place means that you will be 
residing in your own home for the later time 
of your life; not shifting to assisted living or 
senior retirement community.
Seniors require several things to support 
their living conditions. You can claim for 
deductions for the installation of wheelchair 
ramps or grip bars in your home. You are 
also eligible to get deductions on cabinets or 
special equipment to support your aging.
8. Tax Benefits on Selling Your Home
This benefit is even bigger as most people 
are    likely to sell their home at some point.
 If you’ve resided in your house for two out 
of   five years before the sale, you can enjoy 
tax     deductions on any profit you make for 
up to    $500,000 if you’re married and up to 
$250,000   if you are single.
For example, you’re single and you buy a 
home for $3, 00,000 and live in the home 
for 5 years. Over the time you invested $ 
10,000 in            renovations—accounting to 
your total              investment of $3,10,000.
Understanding the tax deductions of owning a home can help you save 
thousands of dollars in tax. 
However, it is important to work with a tax consultant if somehow 
things are not clear to you.
You can read the detailed article here.
Thank you
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