What Tax Breaks Are First Time Home Buyers Entitled To?

By mfishman

While owning a home has always been thought to be the American dream and the best route to building long term wealth, there are various other benefits that are not always considered. For first time home buyers, the amount of tax breaks available is one of the best benefits.

Tax Credit

The first tax break that first time home buyers are entitled to is a federal tax credit. In recent years, the federal government has given various tax credits to first time home buyers. The most recent tax credit, which may be extended in the near future, gave an $8,000 tax credit that a first time home buyer could redeem on their next tax return.

Deduct Interest

The second tax break that first time home buyers are entitled to is the ability to deduct the mortgage interest that they pay. One of the main benefits that is available to both first time and existing home buyers is that mortgage interest may be deducted. This is especially beneficial early in the mortgage when interest accounts for the majority of the mortgagee payment.

Deduct Taxes

The third tax break that first time home buyers are entitled to is the ability to deduct real estate taxes. Real estate taxes, which are levied by local governments, can be quite expensive. Luckily, the entire expense is deductible.

Deduct Fee

The next tax break that first time home buyers are entitled to is the ability to deduct fees. Home buyers are able to deduct various closing costs and fees, such as mortgage points. This could save a first time home buyer hundreds of dollars on their tax return.

What Tax Breaks Are First Time Home Buyers Entitled To?

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