• 100% Satisfaction Guarantee
Guru_Guy, Lawyer (JD)
Category: Tax
Satisfied Customers: 2418
Experience:  I am a lawyer who understands tax law and finance.
1987257
Guru_Guy is online now

# How much do you get back on your taxes from buying a house?

### Customer Question

How much money do you get back on your taxes for buying a home around \$100,000?

Submitted: 9 years ago.
Category: Tax
Expert:  Guru_Guy replied 9 years ago.

Purchasing a home by itself does not give you any tax relief.

However, if you are getting a mortgage, some of those costs could save you some tax money. You can usually deduct points on a first mortgage when purchasing a new home. So, for example, say you put 10% down and get a \$90,000 mortgage to buy your home. Let's say you pay two points on the mortgage. That would cost you \$1800. If you itemize your deductions, you could deduct that on your taxes.

In addition, you can deduct any interest paid on the mortgage during the year, as well as any property taxes. This on a \$90,000 mortgage at 6%, you would start out paying about \$450/month in interest, so if you paid this amount in Oct-Dec. of this year, that would give you around \$1350 in deductible costs. In addition, you would probably pay about 1% of the home's value for property taxes. On a \$100,000 home, this would be about \$1000 per year. If you paid only 1 quarter's taxes in the purchase year, that would be about \$250 more you could deduct.

So if we add all that up, the points, mortgage interest and real estate taxes, gives you about \$3400 in deductions. If you are in the 15% tax rate, this will increase your tax refund by about \$510 (assuming you would have itemized anyway). If you are in the 25% bracket, it would save you about \$850.

Going forward, you can deduct your interest and property taxes each year. This would be about \$6000 worth of deductions per year based on the assumptions above. So that would save you about \$900 per year at the 15% tax rate. Keep in mind that you pay a little less interest each year, so the amount you can deduct each year becomes smaller, but your property taxes will probably go up to compensate.

Of course, your specific savings may vary. Since a standard deduction is \$5,350 for a single person, you may be better off taking that rather than itemizing. In that case, buying the house and getting the mortgage would have no effect on your taxes.

I hope this helps!

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

### What Customers are Saying:

• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
• I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
• Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
• Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
• This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
• Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

• ### Wallstreet Esq.

#### Satisfied Customers:

577
10 years experience
< Last | Next >

### Wallstreet Esq.

#### Satisfied Customers:

577
10 years experience

### Mark D

#### Satisfied Customers:

1245
MBA, EA, Specializing in Business and Individual Tax Returns and Issues

### Richard

#### Satisfied Customers:

3882
29 years of experience as a tax, real estate, and business attorney.

### Robin D.

#### Satisfied Customers:

11072
15years with H & R Block. Divisional leader, Instructor

### Megan C

#### Satisfied Customers:

8621
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

### jgordosea

#### Satisfied Customers:

2884
I've prepared all types of taxes since 1987.

### R. Klein, EA

#### Satisfied Customers:

1837
Over 20 Years experience