Ivory Homes Identifies Tax Benefits as Reason Alone to Consider Home Ownership
SALT LAKE CITY, Utah – Ivory Homes, a leading provider of pre-built and custom built new homes in Utah, is recommending that potential homeowners consider the tax benefits of home ownership when deciding whether to buy a home. They list such advantages as the mortgage interest deduction, prepaid interest deduction and property tax deduction as often overlooked benefits to home ownership.
“There are literally dozens of reasons why now is the best time to buy a home,” said Ty Perry, sales consultant for Ivory Homes. “Interest rates are at all time lows, home prices have plummeted and affordability is sky high, but other advantages that are rarely promoted are the tax benefits of owning a home.”
According to Ivory Homes, the biggest tax advantage is the mortgage interest deduction. The general rule is that for mortgage loans up to $1 million, the mortgage interest paid is fully deductible from a homeowner’s personal tax return. The amount of savings is typically dependent on the homeowner’s current tax bracket, from 15 to 35 percent.
“The tax savings can be significant,” said Perry. “Considering a person’s tax bracket position, for every thousand dollars paid in mortgage interest, there could be anywhere from $150 to $350 in direct savings.”
Furthermore, when someone initially buys a home, typically the lender requires the buyer to prepay interest, or pay points. In the year that the buyer closes on a home, or pays these points, this interest is also deductible.
Ivory Homes identifies the ability to deduct property taxes as another potential advantage of home ownership. “Consider our Davis County homes,” said Perry. “We have properties starting in the $180,000 range. Though Davis County homes don’t incur a high property tax rate, the amount paid annually on one of these homes would be roughly $1,700 — and all of this could be deducted from income taxes.”
Another relatively indirect tax benefit of home ownership is it typically allows the owner to qualify for itemizing deductions. The large deductions associated with mortgage interest and property taxes makes itemizing one’s tax return feasible, which opens the door to other possible itemized deductions, such as charitable donations, job expenses, medical/dental expenses, etc.
Given these tax benefits and the continued attractive market, Ivory Homes sees now as the perfect time to buy new homes in Utah, but they also understand that many potential homeowners continue to rent to avoid the complications associated with ownership.
“Many see renting as a way to avoid dealing with such complications as paying mortgage interest and property taxes,” said Perry. “One thing renters should understand is that when they are paying rent, the property owner’s mortgage interest and property tax obligations are included in that monthly payment ... yet the renter isn’t receiving any tax benefit. Whether people are renting or owning, they are essentially paying property taxes and mortgage interest, but only ownership allows them to take advantage of it.”
Ivory Homes has been Utah’s largest homebuilder since 1990. For more information, contact Ivory Homes’ corporate office, 978 Woodoak Lane, Salt Lake City, UT 84117, call 801-747-7000, visit the website at www.ivoryhomes.com or check out the YouTube channel at www.youtube.com/ivoryhomes.
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