REAL TipS: BUYING

Tax tips for homebuyers

Did you know there are several tax advantages to buying a house? As a homeowner, you can deduct points used to obtain your mortgage, mortgage interest paid during the year, and property taxes.

Most consumers have to take out a mortgage when purchasing a home, and mortgages come with all kinds of costs, including a loan origination fee. This fee is usually a percentage of the loan amount, generally expressed as points. For example, one point on a $150,000 loan would be $1,500. One and a half points on the same loan amount would be $2,250, and so on. When you buy a home, points are deductible in the year they’re paid, providing they meet certain requirements.

You can also deduct your mortgage interest. Once you begin making payments on a property, you will receive statements from your lender indicating just how much interest you have paid on that home in the past tax year. The IRS allows the interest portion of your mortgage payment to be deducted from your federal income taxes.

And finally, your property taxes are deductible as well. While the IRS looks favorably on homeowners, there are some things you cannot deduct, including homeowner’s association fees and mortgage-insurance premiums. Your Texas REALTOR® can be a great source for tax information, but it’s also wise to hire an accountant to help you wade through the details.

Texas Association of Realtors®