Tax Benefit

Tax Benefit of Condo Ownership in Florida

There are many reasons to buy a condo. In condominium ownership, the owner has control, unlike an apartment setting. You have full control over what you do to your condo. It's all your choice as a condo owner. Other benefits include equity, which can build with each payment you make, unlike rent, in which you own nothing, even after years of payments. In addition, real estate traditionally appreciates over time. Lastly, one of the big advantages is that you will be able to get some tax benefits.  The U.S. Government provides tax incentives that make it possible for many homeowners to exceed their standard yearly deductions. For example, condo owners can take advantage of the tax deduction for annual interest paid on their mortgage.  Being able to deduct the yearly interest is great because you will not have to pay tax on this amount. However, the limit on tax deductible interest is $1 million.  If this condo will be a second home, you will need to spend 14 days a year there or 10% as much time as it is rented.

If you have taken a home equity loan or secured other debt for your home, you can deduct the interest on that also up to a limit of $100,000.  Furthermore if you pay for points to reduce the interest rate of your mortgage or another loan linked to your home, you can deduct this amount.  A big tax advantage, that is some of the profit you make on the sale of your home, is tax free.  The limit of tax free dollars is specified as $250,000 for individuals and $500,000 four couples filing jointly.  Property taxes may be included as an income tax deduction for any home you own, and not just your principal residence.  However escrow funds held to pay future taxes are not deductible.  Moving costs may also be deducted if your new home is at least fifty miles closer to your job than your old one.  Although moving expenses can be deducted, the person who moved would have to work full time in the area of their job for at least thirty nine weeks during the following year.  Finally, real estate taxes that are incurred when you own a home can be tax deductible.