The Hidden Payoff: Tax Advantages of Owning a Home
If you’re still renting, it’s easy to look at homeownership as just a bigger monthly payment. But owning a home isn’t just about building equity—it’s also about saving money where it counts: your taxes.
With tax season here and many Western New Yorkers getting their refunds, there’s no better time to talk about the financial benefits of homeownership—and how your tax return might be the perfect way to get started.
1. Mortgage Interest Deduction
One of the biggest tax advantages for homeowners is the mortgage interest deduction. For many people, this deduction alone results in thousands in annual savings. You can deduct interest paid on up to $750,000 of mortgage debt (as of 2024), which means a sizable portion of your payment could come back to you in tax savings.
2. Property Tax Deduction
Homeowners can deduct up to $10,000 of combined state and local taxes, including property taxes. For most Western New York homeowners, that’s money back just for owning your home.
3. Home Office Deduction (If You’re Self-Employed)
If you’re self-employed and work from home, you may be able to deduct a portion of your home expenses, including mortgage interest, utilities, and repairs, for your dedicated workspace.
4. Capital Gains Exclusion
When you sell your primary residence, you can exclude up to $250,000 (or $500,000 for married couples) in profit from capital gains taxes—if you’ve lived in the home for at least two of the last five years. That’s a huge financial edge over renting, where your money goes to someone else’s investment.
5. Home Improvement Tax Credits
While not every improvement is deductible, energy-efficient upgrades (like new windows, doors, insulation, or solar panels) may qualify you for tax credits under the federal Inflation Reduction Act and other state/local programs.
So… Why Rent?
Renting may feel flexible, but it comes with zero equity, zero tax advantages, and rising monthly costs. Homeownership, on the other hand, builds long-term wealth, can lower your tax bill, and offers stability that renting never will.
Make This Year Count: Use Your Tax Return as a Down Payment
Tax refunds can be more than just vacation money or short-term splurges. Many buyers use their refunds as a down payment—even just 3-5% down may be enough to get you into your first home with the right loan program.
At Great Lakes Real Estate, we help first-time buyers across Niagara and Erie County find affordable options, connect with local lenders, and make the most of the market.
Ready to own instead of rent?
Let’s put your refund to work—reach out today and let’s explore your options together. Visit www.GreatLakesRealEstate.com or call 716-754-2550 to start your journey.
