With the current global economic climate, investing in properties might not be your top priority. However, owning a home comes with a world of tangible financial benefits. Here are the most common ones.
Tax Deduction Benefits
When you own a home, you can be sure of many tax breaks. For instance, the tax code will allow you to deduct the mortgage interests from your tax obligations. Since interest payments are the largest components of a mortgage payment, this is a huge deduction to have.
Also, you’re allowed to claim the original fees (also called points) on your loan. Make sure you involve a property solicitor in Townsville, so you understand the tax you’re required to pay and those excluded from when you buy a home.
Real estate values do go up and down depending on the current market prices. Nonetheless, in the long run, real estate values always appreciate.
Apart from value appreciation, it makes a powerful combination when your home value goes up and your debts keep going down if you’re servicing a mortgage.
A Solid Hedge Against Inflation
Think about this: If you have a fixed-rate mortgage, economic changes won’t affect the monthly mortgage payments. The cost of your home remains locked in for the term of your loan. On the other hand, in the case of inflation, the price of goods and services go up.
As such, rent prices sky-rocket, but since you own a home, you have protection against the hefty rent prices. Furthermore, you could always rent extra space in your home and earn extra income.
More Cost-Effective Than Renting
For the first few years, it may appear cheaper to rent than to pay a mortgage. But over time, the mortgage interest portions reduce. Eventually, the monthly payments will be lower than the amount of rent you would be paying.
At long last, the home will be yours, and you can start counting how much you’ll be saving on rent annually.
The financial benefits of owning a home are evident all year round. Particularly around tax time, the perks seem to jump off the page!