Tips On Getting Tax Credit When Buying a New Home
Is it possible to get tax credits when purchasing a property?
The answer is yes! In order to receive the most tax benefits when buying a new house, here is a guide to consider the best possible options:
When buying a house whether or not it’s your first home, the house payment is for both interest and the principal balance along with paying insurance and property tax payments. In most cases, you are able to take a deduction on the interest that you are paying back on your mortgage payment. When you first buy a house, most of the mortgage in the beginning is going towards interest payments. With that said, a big portion of your payment may be eligible for tax deductions. So, even if you have a big mortgage that rolls in every month, just take a deep breath and know that the advantage is shown in a tax break. As well, you can deduct any property tax in which the lender is paying. Property taxes are obtainable for state and local depending on the value of your purchased home. With real estate taxes, even when your property taxes increase, that means the benefit is increasing in tax savings. For this you should receive a 1098 form that is sent out around January of every year.
There is also residential energy credit. This is a tax credit that can be received for up to 30% of the cost when property owners build solar panels, wind turbines, energy efficient heating/air conditioning units and geothermal heating systems into their homes.
As of 2014 congress discontinued the deduction for PMI, so individuals are no longer able to take a deduction on private mortgage insurance premiums.
When buying a house, it is imperative to take into consideration the amount of other itemized deductions you take to receive a deduction. Once you already itemized your deduction, you’ll be eligible to receive the maximum amount of tax credit from your interest and property deductions. Such areas to itemize from are charitable contributions and state income tax.
Once you take into consideration the different areas to receive a tax credit from when buying a new home, you can look for a mortgage company that best satisfies all your needs!