Are Real Estate Taxes Deductible?
If by asking this question you are referring to property taxes, then the answer is yes. The bigger question would be how does it affect you as a taxpayer? This can only truly be answered by a local professional. Some states unlike Minnesota don’t pay any state tax at all. Because of that, the benefits can change.
In the state of Minnesota because we are taxed at roughly 6 ½%, many homeowners not only get to take the federal tax deduction, they also receive a tax rebate check depending on what tax bracket they fall in. If you’re married couple in the 25% tax bracket which is $76,000 to I believe $153,000, you can roughly figure save about 25% of the total real estate taxes paid. So if you have $4000 worth of property tax each year, you can figure you’re saving about $1000 a year in taxes.
Again this does not factor into the state level so you want to talk to a tax professional who can help guide you through all of this and give you all of the accurate information. The bottom line is there are many benefits to owning a home beyond pride of ownership and saving for retirement. In many cases the money you save in interest and property tax as a write-off makes your monthly house payment considerably less than a rent payment.
If you live in the Minneapolis-St. Paul Metro area and you have any questions about buying or selling a home please contact Tom Sommers 952-994-7204.
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