When you begin your search for a second home, the idea of owning a second home may appeal to you simply for the benefits of being able to have a home you can escape to whenever you’d like and that your second home will gain equity over time. However, tax benefits are another factor that you should consider when you are planning on purchasing a second home. When you’re looking for second home in Steamboat Springs, no real estate will beat the luxury and beauty of owning a home at The Porches. And you certainly won’t be disappointed with the tax benefits you will be granted owning a second home in Steamboat Springs.
The Mortgage Interest Is Deductible
When you own a second home, the mortgage interest on your home is deductible. The same rules apply to a second home as they do to a first home when it comes to writing off the interest on your mortgage. You can write off up to 100 percent of the interest on your mortgage up to one million dollars worth of debt, which would include the debt on both your first and second home.
Interest Paid On Home Equity Lines Of Credit Is Deductible
If your second home is in need of any improvements, the interest that you pay on a home equity line of credit is deductible. There will be some stipulations to deductible interest if your home equity line of credit is more than 50,000 dollars if you’re filing single or more than 100,000 dollars if you’re filing married or jointly.
Your Second Home’s Property Taxes Are Deductible
When it comes to property taxes on your second home, the real benefit is that there is no limit on the amount of property taxes that you can claim for deductions. Although, depending on the tax bracket that you find yourself in, there may be limitations on the amount of itemized deductions you can make.
Limited Days Of Rental Income Can Be Tax-Free
Your second home can be rented for 14 days or less within one calendar year, and the income you receive does not have to be reported on your taxes. An added bonus to this is that you don’t have a limit on the amount you can charge on rent during those 14 days.
You’ll Benefit When You Retire To Your Second Home
Once you decide it’s time to retire and move into your second home permanently, the capital gain on your primary residence, up to 250,000 dollars if single, and up to 500,000 dollars if married, may be excluded from your taxable income.
There are many benefits to owning a second home, and the tax benefits you’ll receive from your second home will only prove to benefit your families in even more ways. If you’re looking to purchase a second home in Steamboat Springs, contact us here at The Porches and we can help with your luxury real estate purchase in order to get you the second home you’ve been dreaming of.