Buying a home is the single-most-valuable investment most families make, and home ownership offers income-tax breaks that make it the foundation for overall tax planning. The tax law provides numerous incentives to home ownership, including the following:
Buying a home, rather than renting, replaces nondeductible rent with deductible mortgage interest. Qualified homes include condominiums, co-ops, and mobile homes. By far, the deduction of mortgage interest stands to be one of the most advantageous tax benefits. You may deduct interest up to $750,000 under current tax law for home-mortgage debt.