Are you eligible for a tax break?

Regardless if you are a buyer (first time or repeat), seller or homeowner, you may qualify for a tax break. Consult with your tax advisor to ensure you maximize the credits and deductions that may be available to you.

Owners: The Recovery Act gives incentives to homeowners making improvements and energy-efficient upgrades to their homes. Taxpayers can get credits for 30% of the cost of qualifying doors, windows, HVAC, water heaters, roofing and insulation, up to a maximum credit of $1,500. Solar energy and wind energy systems are each 30% of cost with no maximum.

Sellers: It used to be that sellers had to pay capital gains tax unless they qualified for a one-time exemption based on age limits. That is no longer the case. Individuals don’t have to pay tax on up to $250,000 profit ($500,000 for married couples) and the exemption can be taken repeatedly over a lifetime. Taxpayers have to have lived in the home for at least two of the past five years.

Buyers: Of course, there is the $8,000 tax credit available to first-time buyers who close on or before November 30. But what about repeat buyers and other tax breaks? Points paid on a mortgage are generally deductible as interest if the taxpayer paid enough of a downpayment at closing to cover points. PMI premiums can generally be included in the home mortgage interest deduction. And, if you moved due to a job change, moving expenses may be deductible.

As with all tax breaks, deductions and credits, there are exceptions and qualifications that must be met. This is not intended to provide tax advise; you should always consult with a professional tax advisor to discuss your specific circumstance in order to optimize your benefit.

One response to this post.

  1. Many may not perceived it but it is actually the best time to purchase a new home because of the advantages it offers such as lower price, lower interest rates, tax savings, more choices etc. So instead of wasting money in renting a place, buying something that can be an equity is far more better option.

    Reply

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