There are many benefits to owning a home, such as having a safe and secure place for your family to live, earning equity in an asset that will likely increase in value (given enough time), and having a property that will one day show a return on investment (or make a wonderful inheritance for your children). And of course, you get to spruce it up any way you like to make it more valuable and create your own little retreat from the rest of the world. But it gets even better. As a homeowner you have the opportunity to take advantage of tax breaks that renters will never enjoy. Here are just a few of the major deductions that come with owning property; they could save you a ton on your taxes and even result in a return each year.
The first and biggest deduction that most homeowners take advantage of has to do with the interest on a loan. If, like most buyers, you didn't have the cash on hand to pay for your property up front, you likely had to get approved for a home loan, which means that a percentage of every monthly mortgage payment goes towards the interest. In most cases, this amount is higher in the beginning. Many people don't realize that they actually pay off the calculated interest on a standard, 30-year-fixed home loan first. The benefit of this when it comes to your taxes is that you will get the biggest tax break early on and it will diminish over time since the portion of your mortgage payment that is deductible is the interest payment (not the principle). You may also be able to deduct any interest you pay on a home equity loan, especially if it was used for home improvements, but you need to talk to your tax preparer since there are often restrictions on this type of deduction.
Most home loans (and certainly those associated with the VA, FHA, or RHA) require that you get mortgage insurance for the duration of your loan (just like you must carry full-coverage auto insurance so long as you're paying off a car loan). This might seem like a pain, but it is meant to protect you, your lender, and whatever agency is backing your loan. In any case, you get the added bonus of being able to write off the expense come tax time. There may be two portions to this mortgage insurance, including the up-front mortgage insurance premium, which is a percentage of the cost of your loan, and the regular mortgage insurance premiums you pay annually. You may be able to deduct this expense (or at least a portion of it) on your taxes, so whether you have such a loan to begin with or you secure FHA refinancing, you need to talk to your tax specialist to see if you qualify.
There may be other associated costs of home-ownership that you are eligible to deduct, but interest and mortgage insurance are likely to net you the best savings (or return) on your taxes. Still, you should definitely ask your tax preparer about other potential write-offs so that you can get every benefit you're due as a homeowner.