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Tax Benefits of Homeownership
The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial
benefits of homeownership. Here’s how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______

$12,577 = Total deduction

Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased
when total income reaches a certain level.




                                                       Capstone Realty
                                               7 Town Center Drive Suite 303
                                                    Village of Providence
                                                    Huntsville, AL. 35806
                                              256.382.7300 • 256.382.7301 Fax

Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®.
Copyright 2008. All rights reserved.

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Buyers Tax Benefits

  • 1. Tax Benefits of Homeownership The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works. Assume: $9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest) $2,700 = Property taxes (at 1.5 percent on $180,000 assessed value) ______ $12,577 = Total deduction Then, multiply your total deduction by your tax rate. For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56 $3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate) Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level. Capstone Realty 7 Town Center Drive Suite 303 Village of Providence Huntsville, AL. 35806 256.382.7300 • 256.382.7301 Fax Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved.