How does owning a home bring a tax benefit?


I thought if you own a home, you have to pay property taxes related to your home. If you rent, you pay no property taxes related to your apartment or rented house.

Question :

How does owning a home bring a tax benefit?

Best Solver (Answer):

Answer by tro
owning your own home allows you to probably use Sch A, itemized deductions, which you were not able to do previously
this will definitely reduce your taxable income so that alone makes it beneficial
all property owners pay property taxes, if you rent, the landlord has included that in the amount he charges you for rent so indirectly you are paying some of it but it is of no tax benefit to you
some states have some credits for renters

3 thoughts on “How does owning a home bring a tax benefit?”

  1. There is no tax benefit to ownership per se. The tax benefit is from spending money that most owners spend and no renters spend. When you file your federal income tax return, you can deduct the property taxes and the mortgage interest on Schedule A. This lowers your income tax (not your property tax), usually by 15-35% of what you spent on property taxes and mortgage income.

  2. If you rent YOU don’t pay property tax, but the owner does, so will build it into the rent, so in essence you’ll pay it.

    But tax benefits for owning a home usually aren’t anywhere near as much as people think they’ll be.

  3. In most cases, owning a home will give you the opportunity not to pay taxes on any profit you make when you sell your home. Also you can claim property taxes you pay as an income tax deduction.

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