4/05/2005

Tax Advantages for Homeowners vs. Renters

California Association of Realtors Briefing Paper reminds us of the advantages of owning. Buyers may fear they are buying at the wrong time -- a constantly recurring fear no matter what the market is -- so it is important to keep things in perspective. Mortgage interest and property tax deductions reduce your tax amount by thousands -- a benefit not received by most renters. A homeowner gains market equity over time, or equity through reduction of the loan principal. With the median price home in California at $471,000, and a 20 percent down payment, an owners may have up to $32,000 in deductions which would translate into about $8,000 of tax savings assuming a 25 percent tax bracket. See the Tax value of homeownership and the link to the entire briefing paper.

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