3 Common Myths about How Buying A Home Affects Your Taxes

When people think about the American dream, owning a home is often the first thing that comes to mind. Not only does home ownership provide you with shelter and a place for friends and family to gather, but buying a home can also be a really great long term investment.

Along with all the real benefits of buying a home, a few myths have sprung up, and many of those myths have to do with taxes. Here are 3 common homeowner tax myths that are important to clarify before you purchase your first home.

Myth #1: House repairs are tax deductible

For some reason, this myth perseveres despite the fact that it’s false. You won’t be able to claim roof repairs or a bathroom renovation as a tax deduction.

Even though you won’t get a tax deduction, it’s important to keep detailed records of any repairs because it can add to your home’s tax basis when you decide to sell.

Taxes

Myth #2: I can write off a capital loss

If you end up needing to sell your home for less than you paid for it, then you won’t be able to write off the capital loss. Buying a home can be an inherently risky venture, and unfortunately you can’t count on a tax deduction to help ease any potential losses.

Myth #3: I can deduct my down payment and closing costs

Many people believe you can write off down payments and closing costs, but it’s simply not true. This myth, along with myth #1, can probably be attributed to wishful thinking on the part of home buyers.

Don’t forget the tax benefits of buying a home

Despite these tax myths, there are several tax benefits to buying a home. For example, you can write off the amount of interest you pay toward your home loan, and in many cases, you can even write off the amount you pay in private mortgage insurance.

For more information about mortgage insurance or finding a great home insurance policy for your new house, contact Heuer Insurance today!