San Francisco Real Estate - Janice Lee

There are plenty of reasons why many people today aren’t financially prepared for retirement. We’re living longer, so we have to stretch our savings further. And the pensions that helped previous generations have largely vanished. But that doesn’t mean it’s time to panic quite yet.

The current federal and state tax laws favor and generously reward home ownership. There are numerous ways a condominium, co-op or townhouse owner will save on taxes while building equity in their property. All of the interest paid toward a home mortgage is fully tax deductible. For example: If the total mortgage payment is $3,000 per month (where in the early stages of your mortgage most of the payment is interest), let’s assume the interest is $36,000 per year ($3,000 x 12). If you are in the 28% tax bracket, a $36,000 deduction means a federal tax saving of over $10,000. Meanwhile, the property continues to appreciate in value as your home grows in value.