Benefits of Homeownership

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Tax Benefits of Homeownership
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Benefits of Homeownership
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Purchasing a home is a major milestone in a
person's life, and often referred to as "The
American Dream." Although, homeownership is more
than just achieving a major milestone in an
individual's life it is a gateway to significant
financial advantages. Here are the top four
financial advantages to homeownership.
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1. Taxes - The "IRS Publication 530" lists
deductible expenses from the purchase of a
qualified home. According to the IRS, a qualified
home is your main home or your second home. A
qualified home would be considered a house,
condominium, cooperative, mobile home, house
trailer, boat, or similar property that has
sleeping, cooking, and toilet facilities.
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You can only have and declare one main home at a
time. The deductions for your main home include
real estate taxes, which are paid on your
settlement statement or to a taxing authority
(IRS 530, pages 2 and 3), home mortgage interest,
which is the interest paid on a mortgage or loan
secured by your main home or a second home (IRS
530, page 4), and business expense or rental
income, which is a deduction, if you use part of
your home for your business or rent out part of
your home (IRS 936).
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2. Protection Against Inflation - One of the main
tax benefits of homeownership is the ability to
lock in your mortgage payment with a fixed
interest rate. Although, your taxes and
homeowners insurance may increase over the years,
these increases will likely be far less than how
much typical rent will increase annually.
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3. Increased Personal Wealth - For most
homeowners, their home is their biggest asset.
Most houses appreciate nominally per year,
coupling this with the principal pay down on the
mortgage will result in an annual increase in
the equity in the home.
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4. Diversification of Assets - For the typical
individual, owning a home is their biggest asset.
Coupling homeownership with other assets such as
401(k) retirement plans, Iras savings, stocks,
bonds, and other various investment instruments
that can be used to create wealth will limit your
risk as compared to more volatile assets. If the
stock market goes down, possibly bonds or real
estate may appreciate. Is a great way to protect
yourself and your money long-term?
Source
http//ezinearticles.com/?Benefits-of
Homeownershipid8916020
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