Donald Trump, presidential candidate and real estate mogul, has had his fair share of real estate ownership over the years. His constant media exposure lately is a regular reminder of how property ownership can build wealth. As we continue to watch the Denver Real Estate market rise, there is always discussion about whether owning property or a home makes sense today as home ownership becomes more and more expensive to attain.
Here’s an easy way to understand the main tax benefit of home ownership: Interest on a mortgage paid to a lender is tax deductible. So, if you make $100k and pay $10k of interest to the bank that year for your home mortgage, your tax professional should be able to subtract $10k from your yearly income before factoring what you owe good ole, Uncle Sam. Likewise, property taxes are figured in the same way. Owning a home in Denver creates an asset which typically grows in value over time. This is why many Denver Metro realtors continue to encourage many to become part of the Denver Real Estate market.
From a tax perspective, owning a home almost always makes more sense than renting as it will decrease the amount you will have to pay to the government. However, buying a home may not be for everyone. Low home inventory, temporary financial situations, divorce, unavailable funding for a down payment, and careers that require frequent and unexpected moves are all examples of why renting can at times be a smarter choice.
As you prepare your taxes this April, take the time to review your real estate situations. Tax deductions can be complicated and change as your situations change. Please consult your local certified tax and financial professionals to ensure your deductions are properly and fully optimized and if home ownership can benefit you. Corken + Company has many trusted partners for your tax and financial needs. Contact Corken + Company today for more information on the Denver Real Estate market.
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