Tax Benefits of Property Ownership

I'll preface this with saying I am not a tax accountant, and I ascertained this information from the ever wonderful real estate resource REALTOR.ORG.

The tax deductions you are eligible to take for mortgage interest and property taxes greatly increase the overwhelming financial benefits of owning real estate.

Let's do some math.

Assume:

$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7%, with a fixed rate loan).
$2,700 - Real Estate Property Taxes (at approximately 1.5% on $180,000 assessed value).
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$12,577 = TOTAL DEDUCTION

Than, you have to multiply your total deduction by your tax rate.

For example, at a 28% tax rate: 12,577 x 28% = $3,521.56

$3,521.56 = AMOUNT YOU HAVE LOWERED YOUR FEDERAL INCOME TAX (at 28% rate).

Keep in mind - your mortgage interest may not be deductible on loans over $1.1 million. Also, deduction amounts are decreased when your total income reaches a certain level.