TYPICAL HOMEOWNER
COULD REAP $6,500 ANNUALLY
IN TAX SAVINGS

There are numerous tax benefits of homeownership available to filers, according to a Research Briefing Paper released by the California Association of Realtor's Research and Economics Dept. In addition to home equity gains that can be shielded from income tax through the sale of a home, there also are interest and property tax deductions available to homeowners when tax time approaches.

According to the paper, the purchase of a single-family home in California today at the current median price of $471,620 would generate a property tax deduction of approximately $4,700 each year -- about 1 percent of the property value. Over a 12-month period, mortgage interest paid would total $21,420, assuming a 20 percent down payment and a mortgage interest rate of 5.71 percent. That translates into a total tax savings for homeowners in the 25 percent tax bracket of approximately $6,500 for the first year of homeownership.

Source: North County San Diego California Association of Realtors

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