Bigger home, bigger tax break
Question: My wife and I are in the 33 percent tax bracket. We’re getting the standard tax breaks for owning our home, having a child and making charitable contributions, but we’re getting hit hard with taxes. Do you think we should buy a bigger home to get a bigger tax break?
Yes, buying a larger and more expensive home can lead to bigger tax breaks. A larger mortgage can translate into a larger mortgage interest deduction. If you pay points for your mortgage – and pay them in cash – you can deduct them. And, who knows, maybe you’ll be really lucky and your property taxes will go up and you’ll get a bigger deduction there as well.
But, remember, the deduction doesn’t eliminate these costs. It just lowers them. So by buying a larger and more costly house you are increasing the amount of money you spend on housing, even after the deductions.
Ready to buy or sell Les Jardins neighborhood community real estate? Consult with licensed agent Caesar Parisi. Caesar has assisted hundreds of buyers and sellers, giving sound advice on how to most effectively buy and sell property.
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