The Financial Benefits of Buying a Home or Second Home in the US
Many people want to become homeowners someday. With owning a home or second home in the United States comes not just pride, but additional financial benefits.
There are many financial benefits to buying a home or a second home in the United States. Capital appreciation in your home and equity buildup can allow you to sell your property at a higher price than what you bought it for. There are also many tax benefits for property owners in the U.S., including those who own rental or investment properties. Purchasing a second home can help you increase cash flow as well. Our experienced professionals can help you understand the ins and outs of real estate and how it relates to your tax liability so that you can comfortably proceed.
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If you’re interested in buying a home or second home in the U.S., ask our tax CPAs about how doing so might impact your taxes. To learn more about how the tax accountants at US Tax Help can assist you, call us today at (541) 362-9127.
What Are Some Financial Benefits of Buying or Second Home in the US?
If you are interested in securing your financial future, buying a home or a second home in the United States might be the answer. Owning real estate opens up the opportunity for capital appreciation, tax savings, cash flow, and equity buildup, among other benefits. Our tax accountants can explain the ins and outs of purchasing a home or an investment property in the U.S. so that you can more easily attain this goal.
Purchasing property, whether a home your family can live in or an investment property to rent, can result in capital appreciation. Simply put, capital appreciation is the difference between the price of a property when you purchase it and the price of a property when you sell it. This applies to property owners of all kinds, including homeowners and investment property owners. If the area you live in or own real estate in increases in popularity over the years, so may the capital appreciation on your property.
There are several tax benefits to owning a home or a second home in the United States. As our tax accountants can explain to you, single filers and married couples filing jointly can deduct up to $750,000 in mortgage interest from all properties they own. This includes investment or rental properties. Homeowners can also deduct property taxes on all properties, up to $10,000 if they are filing jointly or $5,000 if they are filing alone. There are additional tax benefits for those that purchase a second home with plans to rent it out for a few days out of the year.
Suppose you enjoy hiking and spending time outdoors. If you were to purchase this house in Oregon as a vacation home for you and your family to use but only rent it out for less than fourteen days out of the year, your income from renting will be tax-free.
Purchasing a second home can allow you to earn additional income by renting it out. People interested in taking this route may choose to purchase a vacation home and rent it out for a portion of the year so that they can also enjoy it with their family. Whether you buy a property for investment purposes or partial rental and vacation purposes, you can increase your family’s income. Our tax accountants can help you understand how the income from rental properties should be reported on your taxes so that you can avoid any tax issues after purchasing a second home or investment property in the United States.
Building equity in a home or second home allows you to increase the difference between the value of a property and what you owe on your mortgage. You can do this by adding additions or appealing amenities that increase the value of your home. You can also achieve equity buildup by decreasing the amount you owe on your mortgage with the added income from a rental property.
Should I Purchase a Home or Second Home in the US?
Many people in the United States want to purchase property and own a home. Because it is a serious commitment, some people may hesitate to take the leap and start getting involved with real estate. If you want to buy a home or a second home in the United States but are concerned about the risks, reach out to our tax accountants.
There are many financial benefits to owning property in the United States. Still, it is important to understand what purchasing a home or a second home might mean for you. There may be additional hurdles if you are a foreign investor looking to purchase investment properties in the United States or a resident purchasing property from a foreign investor. You may be subject to Foreign Investment in Real Property Tax Act (FIRPTA) withholding in either case. Our tax accountants can help you understand what FIRPTA withholding means for your real estate endeavors and how to properly report it.
If you want to benefit from capital appreciation, tax savings, cash flow, and equity buildup, consider buying a home or a second home in the United States. Before you do, consult with our tax CPAs to learn more about your reporting requirements as a real estate owner or investor.
Call the Tax CPAs at US Tax Help Today
Engaging in real estate can be a wise decision to secure your financial stability. To learn more about how the tax accountants at US Tax Help can assist you, call us today at (541) 362-9127.