Tax Return Depressing? Owning a Home Could Help

Many Americans got some depressing news this week; either their tax return was not as large as they had hoped or, in some cases, they were told they owed additional money to either the Federal or State government or both. One way to save on taxes is to own your own home.

According to the Tax Policy Center’s Briefing Book -“A citizen’s guide to the fascinating (though often complex) elements of the federal Tax System” – there are several tax advantages to homeownership.

Here are four items, and a quote on each, from the Briefing Book:

1. Mortgage Interest Deduction

“Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage. The deduction is limited to interest paid on up to $1 million of debt incurred to purchase or substantially rehabilitate a home. Homeowners also may deduct interest paid on up to $100,000 of home equity debt, regardless of how they use the borrowed funds. Taxpayers who do not own their home have no comparable ability to deduct interest paid on debt incurred to purchase goods and services.”

2. Property Tax Deduction

“Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.”

3. Imputed Rent

“Buying a home is an investment, part of the returns from which is the opportunity to live in the home rent-free. Unlike returns from other investments, the return on homeownership—what economists call “imputed rent”—is excluded from taxable income. In contrast, landlords must count as income the rent they receive, and renters may not deduct the rent they pay. A homeowner is effectively both landlord and renter, but the tax code treats homeowners the same as renters while ignoring their simultaneous role as their own landlords.”

4. Profits from Home Sales

“Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale. But homeowners may exclude from taxable income up to $250,000 ($500,000 for joint filers) of capital gains on the sale of their home if they satisfy certain criteria: they must have maintained the home as their principal residence in two out of the preceding five years, and they generally may not have claimed the capital gains exclusion for the sale of another home during the previous two years.”

Bottom Line

We are not suggesting that you purchase a house just to save on your taxes. However, if you have been on the fence as to whether 2017 is the year you should become a homeowner, this information might help with that decision.

Disclaimer: Always check with your accountant to find out what tax advantages apply to you in your area. 

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36001 N Kennedia Lane Queen Creek, AZ 85140

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$475,000

2 Beds

2 Baths

1,342 SqFt

Status Active

MLS # 6676359

Property Type Townhouse

Price Type --

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14638 W Raindance Road Surprise, AZ 85374

Open House

$475,000

4 Beds

3.5 Baths

1,986 SqFt

Status Active

MLS # 6640401

Property Type Single Family Residence

Price Type --

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9455 E Raintree Drive Scottsdale, AZ 85260

Open House

$475,000

3 Beds

2 Baths

1,509 SqFt

Status Active

MLS # 6671237

Property Type Apartment

Price Type --

HUGE PRICE REDUCTION! Great Opportunity !! Ground Floor End Unit in Ladera Vista Condos. Remodeled Kitchen: Quartz Countertops, Marble Backsplash, Cherry Wood Cabinets, 20''x20'' Tile Floors, Pantry with Pull-Out Drawers, SS Appliances. Remodeled Master & Hall Baths. Enjoy the Rain Shower Head in Master! 3rd Bed used as a Den., no closet. Newer HVAC & Hot Water Heater. NO Carpet - all Hard Floor Surfaces. Natural Lighting from Many Windows and Sliders. Two patios for Easy Relaxing Times. Appliances Stay. Cute Ceiling Fans, too. Assigned Covered Parking is located directly by the Front Door. Gated Community with Heated Community Pool & Spa. Ladera Vista is close to AJ's, Starbucks, restaurants, golf, hiking, Westworld, 101 & so much more.

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354 W Coolidge Avenue Coolidge, AZ 85128

Open House

$475,000

4 Beds

2 Baths

1,751 SqFt

Status Active

MLS # 6675103

Property Type Single Family Residence

Price Type --

NEW- HUGE PRICE REDUCED!!! This retail storefront is Zoned Mixed Commercial Use and is NOT zoned for residential only! The property was most recently used as a group home. Whether you are going to run a business and occupy a portion of the buillding or set up an office this is an amazing Store front location. This retail storefront was recently and thoughtfully updated in 2023/2024. Updates include New premium Vinyl flooring with 5'' baseboards, kitchen cabinets, granite countertops, sleek stainless hood vent, stainless sink in kitchen with upgraded faucet, new waterheater and closet, bathroom vanities toilets and exhaust fans, new interior/exterior led lighting, new paint interior/exterior, wall panels, 25' rear entry gate floor paint on back patio.

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4525 N 66th Street Scottsdale, AZ 85251

Open House

$475,000

3 Beds

2 Baths

1,962 SqFt

Status Active

MLS # 6620593

Property Type Townhouse

Price Type --

Welcome to your new home in a prime Scottsdale location. This three-bed, two-bath townhouse has BRAND NEW LVP flooring throughout, is light and bright, and offers a great floorplan. With 1,962 square feet and an open-concept layout, you have ample space to relax and entertain. The property boasts a larger lot in the community, ensuring privacy & tranquility with the added luxury of no neighbors behind. This gated community offers exclusive amenities, including three community pools, a clubhouse, a workout facility, and a tennis court. Take advantage of the Arizona sunshine & cool off in one of the sparkling pools, or challenge friends & family to a friendly game of tennis. Located within walking distance to Old Town Scottsdale, you'll have access to some of the best dining, shopping, and entertainment the city has to offer. Fashion Square Mall is also just a short stroll away, providing endless shopping opportunities. If you enjoy the outdoors and hiking, Camelback Mountain is just minutes away! With short-term rentals allowed, this property offers the potential for a lucrative investment opportunity. Whether you're looking for a stunning primary residence or a profitable rental property, this townhouse is the perfect choice. Don't miss out on this incredible opportunity - schedule a viewing today and make this beautiful townhouse your new home or investment property!

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1843 E Anchor Drive Gilbert, AZ 85234

Open House

$475,000

3 Beds

2 Baths

1,488 SqFt

Status Active

MLS # 6681758

Property Type Single Family Residence

Price Type --

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6030 W Riviera Drive Glendale, AZ 85304

$474,999

4 Beds

2 Baths

2,120 SqFt

Status Active

MLS # 6693144

Property Type Single Family Residence

Price Type --

Welcome to this lovely 4-bedroom, 2-bathroom home. Offering 2,120 sq ft, the charming exterior has great curb appeal. While the interior features a spacious formal living and dining area, and a family room with a cozy fireplace. The kitchen showcases white cabinetry, granite countertops, subway tile back splash, stainless steel appliances, and a kitchen island. Master suite has a beautiful view overlooking the pool and master bath has dual sinks and a lovely custom tile walk-in shower. Home has shutters, tile plank flooring in all the right places and new carpet in bedrooms. Additional bathroom has been updated throughout and offers a subway tile shower. The large backyard offers a pool and ample space for outdoor activities. Located is a highly sought location. Must see this beauty.

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9814 N 50th Drive Glendale, AZ 85302

$474,999

5 Beds

2 Baths

2,378 SqFt

Status Active

MLS # 6676449

Property Type Single Family Residence

Price Type --

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40386 W Michaels Drive Maricopa, AZ 85138

$474,995

4 Beds

3 Baths

2,400 SqFt

Status Active

MLS # 6682259

Property Type Single Family Residence

Price Type --

The heart of this ranch floor plan is an open layout with a great room, a breakfast nook and a gourmet kitchen with a walk-in pantry and a center island. The owner's suite is adjacent, and showcases a generous walk-in closet and an attached bath with double sinks and deluxe shower with separate tub. A private study with French doors, three bedrooms and two baths round out the residence. A covered patio is included!

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20276 W Montecito Avenue Litchfield Park, AZ 85340

$474,995

4 Beds

3 Baths

2,090 SqFt

Status Active

MLS # 6686921

Property Type Single Family Residence

Price Type --

Explore this Dynamic Emerald home ready for quick move in on homesite boasting driveway pavers and front yard landscaping. Included features are an inviting covered entry, quiet study, large living room well appointed kitchen with 42'' cabinets, quartz counter tops, stainless steel appliances, roomy pantry and center Island. Enjoy the elegant dining room and spacious great room, a lavish primary suite showcasing a generous walk-in closet. The private bath has cultured marble counter tops and convenient laundry and covered patio and 2 car garage. This home also has an In-Law suite with its own entrance, plumbing for a stackable washer-n-dryer, is pre-plumbed for sink and has a power outlet for a refrigerator. The suite has its own living room, bedroom and private bathroom.

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21673 N Daniel Drive Maricopa, AZ 85138

$474,995

4 Beds

3 Baths

2,721 SqFt

Status Active

MLS # 6633355

Property Type Single Family Residence

Price Type --

Explore this exciting Tourmaline home! Highlights: a primary suite with a walk-in closet and attached bath, three inviting secondary bedrooms, a convenient laundry, a generous great room and dining area, a loft and a well-appointed kitchen with a center island and a built-in pantry. You'll also appreciate designer-curated details, such as quartz countertops in the kitchen and bathrooms, tile flooring, two-tone paint, a tile surround in the primary bath, a concrete paver driveway and walkway, and more!

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18570 W Honeysuckle Drive Surprise, AZ 85387

$474,995

3 Beds

3 Baths

2,092 SqFt

Status Active

MLS # 6651225

Property Type Single Family Residence

Price Type --

Welcome to this eye-catching Emerald home, ready for quick move-in! Included features: a covered entry; a spacious great room with center-meet doors leading onto a covered patio; a dining nook; a thoughtfully designed kitchen boasting 42'' upper cabinets, quartz countertops, a center island and stainless-steel appliances, including a gas range; a convenient laundry; a lavish primary suite showcasing an oversized walk-in closet and a private bath; and a second suite offering a private entry, a living room with a laundry closet, a bedroom and an attached bath. This home also has wood laminate flooring, cultured marble bathroom countertops, added windows, ceiling fan prewiring, front yard landscaping and a concrete-paver driveway and walkway.

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