Tax Benefits for Buying a Home With Cash
Are there any tax benefits you can get for buying a home with cash?
Laura Adams, MBA
Sharon J. wants to know:
We built a new house on land that we already owned and paid for the construction with cash. Are there any tax benefits we can get for it?
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There are no tax deductions for making improvements to a residence or paying for a home with cash.
That may not seem fair when compared to homeowners who get to deduct the cost of their mortgage interest and purchase points.
However, not having a mortgage allows you to save a huge amount of money. If you had taken out a $150,000 mortgage at 4% for 30 years to build your home, you’d end up paying over $107,000 in interest alone.
You can deduct any state or local real estate taxes charged for your property, if you itemize deductions on your tax return.