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Benefits of Home Ownership in Austin, Texas
There is little debate about the benefits of owning a home in Austin verses renting a home. In this advice column, I will outline the main benefits of home ownership in Austin. First, watch this video of ASC's Ellie Evans and Amelia Bullock's Robin Scott to learn more about buying a home in Austin, Texas.
1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home. 2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing. 3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home. 4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax. 5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase. 6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home. 7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity. Tax Benefits of Home Ownership $9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest) $12,577 = Total deduction Then, multiply your total deduction by your tax rate. For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56 $3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate) Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
Want to know more about the benefits of home ownership in Austin? Contact Robin Scott.
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