What Tax Benefits Can I Expect When Buying a Los Angeles Home?

If you are on the fence about buying a Los Angeles home, consider that the tax benefits of Los Angeles home ownership can be attractive.

What are the tax benefits of buying a Los Angeles home?

  • Mortgage interest reduction. A Los Angeles homeowner can deduct the interest on a mortgage up to $1 million on a principal residence and/or second home.  Depending on your income bracket this could reduce the cost of your payments by a third or more.
  • Property taxes.  Local and state property taxes paid can be deducted on your federal income tax return.
  • Cost of home purchase.  There are various costs involved when you buy a Los Angeles home:  closing costs, loan origination fees, prorated interest on a new loan, prorated property taxes paid on closing.  All these are deductible expenses.
  • Home -sale exclusion  This applies to Los Angeles homeowners who have lived in their home for any two years of a five-year period prior to the sale.  You can deduct $250,000 as a single person, or $500,000 as a married couple filing jointly, from the overall profit on the sale, thereby avoiding taxes on that portion of the profit.
  • Rental income.  Los Angeles homeowners may rent their homes for up to 14 days a year and pay no tax on that income.

These are some great reasons to consider when looking at the benefits of home ownership.

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4 thoughts on “What Tax Benefits Can I Expect When Buying a Los Angeles Home?”

  1. Gosh, I just love your new header, Jane! It’s the perfect size and allows your viewers to see your home search straight away.

    Thanks for contributing this article to our site. What wonderful information for your LA homebuyers as well as any across the US.

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