The total rental payments and the individual’s share of expenses are used to calculate the total financial burden of an apartment. Buying a condo is a great opportunity for a person to lower their Effective Monthly Payment (EFP) and build equity in a condo that can become a future income producing property. Low down payments as low as 3-5% present options for people, who often do not have the financial resources for a conventional 20% down payment. Leveraging a low down payment can allow a person to purchase a condo; lowering their monthly payments with tax deductions.
What is often overlooked is the year-end tax refund when factoring the total cost of living. The IRS allows you a standard deduction of $6,100 from your Annual Gross Income for the year, which is used to calculate your taxable income.
When you purchase a home there are many deductible expenses such as mortgage interest and real estate taxes. Having these deductions will put you over the $6,100 threshold which allows you to itemize other deductions such as motor vehicle excise tax and charitable donations. Which, prior to being able to itemize you were not recognizing any taxable refund on. If you still haven´t found a home that you can afford then you should think about looking at these residential property listings for great options.
In order to help you get a general idea of how much of an additional refund you can expect from what you got last year I have created calculator. This calculator gives you the amount of additional refund you can expect to receive in your taxes due to your home purchase. This is calculated by taking the amount you would have owed the IRS without owning a house and with owning a house. Download it below.
