The interest you pay on your mortgage is deductible from your income.

Your property tax is income tax deductible as well.

You can also deduct any amount you pay for points to reduce the interest rate of your mortgage or other loan linked to your home. In most cases, the points on a mortgage to buy or build your principal home can be deducted fully in the first year. However, if you refinance, take a home equity loan, or a loan secured by a second home, the points must be deducted over the life of the new loan. The exception is if you use part of a refinanced mortgage to improve your house; that portion of the points can be deducted in the same year.

When figuring your tax benefits from home ownership you should speak with a licensed accountant and find out all the benefits available.

Some mortgages offer more tax deductability than others. With a combination loan (i.e. 80 / 20 ) most of your payment in the first few years may be tax deductible.

 

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