The tax benefits of homeownership are one of the many reasons that people buy a home. For MA taxpayers, owning a home makes a huge difference in their tax liability. Individuals comparing renting versus buying will actually include the tax advantages in their comparison. House GOP members are currently discussing tax changes that could put some MA home ownership tax deductions at risk. This is important news for MA homeowners. Here’s what you should know if you own a home or are thinking of purchasing one.
The good news is that mortgage interest deductions are considered pretty safe, at least for the moment. For most homeowners, mortgage interest represents the bulk of their home ownership tax deductions. However, high end homebuyers should be aware that the advantages for high-priced homes may be somehow reduced.
Real Estate Property Taxes
Another important home ownership tax advantage is the property tax deduction. Depending on where you live and how high the property tax rates are, the ability to deduct property taxes may make a big difference on your tax returns. This tax deduction is likely to be eliminated under the GOP tax plan.
Why Are MA Home Ownership Tax Deductions at Risk?
Why are these changes being considered? Plans are to reduce income taxes across the board while having a neutral impact on overall tax revenues. Therefore, the funds need to come from elsewhere. In addition to the two MA Home Ownership Tax Deductions at Risk noted above, other changes are being discussed. Among them are the state tax deduction and employer health insurance exemption. The continued discussions in the House and the release of any further details should be something that all MA homeowners should be aware of.