Many lenders and Realtors tout the tax benefits from buying a home because buyers can deduct their interest and property taxes from their income after they buy. For buyers in high tax brackets these tax savings can work out to be over $1,000 per month in high end markets.
Tax Benefits of Buying a Home
This is a very important consideration for payment-sensitive renters who are considering a purchase and nervous about their housing payment jumping from $2,500 (for rent) to $4,000 (for PITI).
What many lenders and Realtors often do not point out, however, is that buyers can realize their tax benefits right after buying by increasing their allowances or exemptions on their IRS W4 form. This allows them to maximize their take-home pay right out of the shoot and avoid much of the pain resulting from an increased housing payment.
How to Adjust Your W-4 to Maximize Savings
Buyers should consult with their CPA or tax planner to figure out their optimal number of exemptions.
