|
Because of income tax
deductions, the government is basically subsidizing your purchase of a home.
All of the interest and property taxes you pay in a given year can be deducted
from your gross income to reduce your taxable income.
For example, assume
your initial loan balance is $150,000 with an interest rate of eight percent.
During the first year you would pay $9969.27 in interest. If your first
payment is January 1st, your taxable income would be almost $10,000
less – due to the IRS interest rate deduction.
Property taxes are deductible,
too. Whatever property taxes you pay in a given year may also be deducted
from your gross income, lowering your tax obligation.
|
