How do tax incentives affect home values? Q.How do tax incentives affect home values? A.Research has shown that the dramatic reduction of incentives in the 2017 Tax Cuts and Jobs Act only slightly reduced home prices. Local supply and demand conditions, plus prevailing interest rates, play a larger role than tax incentives. Read more about How do tax incentives affect home values?
What are the tax benefits of homeownership? Q.What are the tax benefits of homeownership? A.The main tax benefit of owning a house is that the imputed rental income homeowners receive is not taxed. Although that income is not taxed, homeowners still may deduct mortgage interest and property tax payments, as well as certain other expenses from their federal taxable income, if they itemize their deductions. Additionally, homeowners may exclude, up to a limit, the capital gain they realize from the sale of a home. Read more about What are the tax benefits of homeownership?
What are options to reform tax incentives for homeownership? Q.What are options to reform tax incentives for homeownership? A.Replacing the mortgage interest deduction with a first-time home buyers tax credit or a nonrefundable credit at a set percentage of interest would provide a homeownership tax incentive to more families, including those with lower incomes. Read more about What are options to reform tax incentives for homeownership?