For families and individuals in the suburbs north of Boston, buying a home is not just a major life milestone—it’s also a financial decision that can provide significant tax benefits. At The Ternullo Real Estate Team, we aim to guide you not only in finding your dream home but also in understanding how homeownership can positively impact your finances.
Here’s how purchasing a home can help you save during tax season:
1. Mortgage Interest Deduction
One of the most valuable tax benefits of homeownership is the ability to deduct mortgage interest. For many homeowners, this deduction can significantly reduce taxable income.
If your mortgage meets IRS requirements, you can deduct interest on up to $750,000 of mortgage debt (for mortgages obtained after December 15, 2017). This deduction is particularly beneficial in areas like the Boston suburbs, where home prices tend to be higher than the national average.
2. Property Tax Deduction
While owning a home means paying property taxes, there’s a silver lining: you can often deduct these taxes on your federal tax return. The deduction for state and local taxes (SALT), including property taxes, is capped at $10,000, but it remains a valuable benefit for homeowners in Massachusetts.
3. Tax-Free Capital Gains When Selling
When you eventually decide to sell your home, you may benefit from a tax break on capital gains. If you’ve lived in your home for at least two of the last five years, you can exclude up to $250,000 of profit (or $500,000 for married couples filing jointly) from your taxable income.
This is a significant advantage for homeowners looking to sell and reinvest their profits without facing a hefty tax burden.
4. Energy-Efficient Home Credits
Investing in energy-efficient upgrades, such as solar panels, improved insulation, or high-efficiency windows, could make you eligible for federal tax credits. Additionally, Massachusetts offers incentives for eco-friendly home improvements, providing further opportunities to save on your taxes while reducing energy costs.
5. Building Equity and Tax-Advantaged Wealth
While not a direct tax benefit, building equity in your home is a long-term financial advantage. Unlike rent, which offers no tax advantages, paying down your mortgage helps you build wealth over time. Equity acts as a form of savings and can significantly increase your net worth.
Important Considerations
While these tax benefits are attractive, it’s crucial to consult with a tax professional to ensure you understand how they apply to your unique circumstances. Tax laws can change, and factors such as income levels, filing status, and loan type may impact your eligibility for deductions.
Ready to Buy? Let’s Talk!
Owning a home can be both a personal and financial win, and The Ternullo Real Estate Team is here to help you navigate every step of the journey. Whether you’re purchasing your first home or upgrading to a larger space in the Boston suburbs, we provide expert guidance tailored to your needs.
Contact us today to explore available properties and learn how homeownership can benefit you both now and in the future!
John and Michelle Ternullo lead The Ternullo Team at Leading Edge Real Estate. Lifelong residents of the North of Boston area, they focus exclusively on residential purchases and sales. Their team approach ensures clients benefit from their combined strengths, offering expert guidance in marketing, negotiations, pricing strategies, and more. Dedicated to achieving top results, they make the home buying and selling process seamless and successful for their clients.