Friday, April 08, 2005

Did Someone Say Tax Savings?

Tis the season! Are you one of those grumpy people mumbling under their breath about meeting with your accountant to prepare those taxes. Is your pen ready to write that check and send it off on April 15th?

There are numerous tax benefits of homeownership available to filers, according to a Research Briefing Paper released by C.A.R.'s Research and Economics Dept. In addition to home equity gains that can be shielded from income tax through the sale of a home, there also are interest and property tax deductions available to homeowners when tax time approaches.According to the paper, the purchase of a single-family home in California today at the current median price of $471,620 would generate a property tax deduction of approximately $4,700 each year -- about 1 percent of the property value. Over a 12-month period, mortgage interest paid would total $21,420, assuming a 20 percent downpayment and a mortgage interest rate of 5.71 percent. That translates into a total tax savings for homeowners in the 25 percent tax bracket of approximately $6,500 for the first year of homeownership.

Since we live in an area where the prices are even higher, your savings should be even greater!


At 4/09/2005 9:35 AM, Blogger Lorraine Burns, Realtor said...

Wow! This is an eye-opening report! Thank you Hope.


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