Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
To be treated as a rental property for tax-loss purposes, your personal use of the place can't exceed 14 days or 10% of the days the unit is rented during the year, whichever is greater.
In terms of a tax advantage, if you purchase a primary residence to live in especially in high tax areas in NY such as Nassau or Westchester County, you can offset your personal income taxes by the real estate taxes you pay, including mortgage interest.
If you purchase a rental or investment property their are several more tax deductions for you and will reduce your overall tax rate, especially if you can claim a loss through depreciation and improvements to the property.
The above list shows the many tax advantages of owning an investment property.
Thanks for your response. Just to confirm, if we buy a property and live in it (as our primary residence) and get an interest only loan for a period of say 5yrs, we can offset the entire yearly interest paid against my income taxes?
Home mortgage interest is deductible on your income taxes if you itemize. You can deduct the interest on up to one million dollars of home mortgage debt, whether it is used to purchase a first or a second home
thanks very much, very useful.