Tax Benefits For All Home Buyers

Buying a first home also makes you eligible for the tax benefits afforded to every home buyer, whether it's their first home or not.

Moving Expenses

Moving expense may be tax deductible for a move related to the start of work at a new workplace. If the new workplace is outside the United States or its possessions, you must be a U.S. citizen or resident alien to deduct your expenses.

Home Mortgage Interest Deduction

“The IRS allows you to deduct for the interest you pay your lender,” says Greene-Lewis. Home mortgage interest is one of the biggest deductions for those who itemize, and can make a huge difference for filers. You should be advised of interest paid to your lender on a 1098 form sent out annually in January and/or early February.

Points or Loan Origination Fees Deduction

The fees you pay to obtain a home mortgage may be applied as a deduction, according to Greene-Lewis. “Points will also be reported on Form 1098 from your lender or your settlement statement at the end of the year.” The rules for how you deduct points are different for a first purchase or a refinancing, she explains.

Property Tax Deduction

Property tax deductions are available for state and local property taxes based on the value of your home. The amount that's deducted is the amount paid by the property owner, including any payments made through an escrow account at settlement or closing. “You may find property taxes paid on your 1098 form from your mortgage company if your property taxes are paid through your mortgage company,” says Greene-Lewis. “Otherwise, you should report the amount of property taxes you paid for the year indicated on your property tax bill.”

Residential Energy Credit

Homeowners who install solar panels, geothermal heat systems, and wind turbines – or energy-efficient windows or heating and air-conditioning systems – to their home may receive a tax credit worth up to 30% of the cost.

Find out more about tax credits by contacting your local tax professional or visiting the IRS website:

• Moving Expenses
• Residential Energy Efficient Property Credit
• Non-business Energy Property Credit
• Low-Income Housing Credit (for Owners)
• Frequently Asked Questions on Capital Gains, Losses, and Sale of Home