Mortgage Tax Deduction Big Driver for New Home Buyers, Says Report

Real estate and tax experts agree that the tax benefits of homownership are excellent-up to $1 million of acquisition mortgage debt qualifies for interest deduction.
RISMedia
As tax season progresses, various homeowner tax benefits highlight the need for top online resources like GuideToRealty.com, an online consumer resource for real estate buyers and sellers.

As a result of changes to the tax laws this year, many Americans may qualify for tax savings in the form of energy credits as a result of home improvements. Homeowners can claim up to $300 for installing energy-efficient air conditioners or heaters, $150 for a furnace and up to $200 for new energy-efficient windows.

Says Jeff Pretsfelder, a senior tax analyst with Thomson Tax & Accounting, "You may not have intentionally set out to make improvements to earn these credits, but you may nonetheless qualify for them."

These savings are in addition to home loan benefits: in some cases points or loan origination fees are tax deductible and, in general, interest charged on a mortgage loan is tax deductible.

Married homeowners selling this year can possibly earn up to $500,000 from the sale of the home and pay no income tax, according to Realtor.com.