What is tax-deductible when buying a home? When you buy a home, you can generally deduct origination and discount points, interest you pay during the year, and property taxes. When refinancing, points are not deductible; instead you have to "depreciate" them over the life of the loan. Other closing costs (such as the cost of the appraisal, inspection, credit report, etc) are not tax-deductible, regardless of whether you are buying or refinancing. The down payment is not tax-deductible either. One detail that may surprise you - when you are buying a home, you can deduct the points even if the seller pays them.
These are general rules-of-thumb, and they might be different for you, depending on your situation (your income level, the purpose for buying the home, etc). Consult your CPA for specific guidance.
Amit Bhuta
Real Estate Helper
Kendall Village Homes
(305) 439-3031
www.DadeCountyMLS.com
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