Typical homeowner could reap $7,430 annually in tax savings
LOS ANGELES (April 12) As the April 15 income tax filing deadline approaches, there are numerous tax benefits of homeownership available to filers, according to a Briefing Paper prepared by the California Association of REALTORS®´ (C.A.R.) 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 C.A.R. Briefing Paper, the purchase of a single-family home in California today at the 2005 median price of $524,020 would generate a property tax deduction of approximately $5,240 each year — about 1 percent of the property value. Over a 12-month period, mortgage interest paid would total $24,470, assuming a 20 percent downpayment and a mortgage interest rate of 5.87 percent. That translates into a total tax savings for homeowners in the 25 percent tax bracket of approximately $7,430 for the first year of homeownership.
C.A.R.´s Research Briefing Paper detailing the tax advantages of homeownership is available on C.A.R. Online at http://www.car.org/index.php?id=MzYwNDc=.
Leading the Way…® in California real estate for more than 100 years, the California Association of REALTORS® is one of the largest state trade organizations in the United States, with more than 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.