5 Tax Deductible Closing Cost Items For First Time Home Buyers
Hi, as a Real Estate Broker, many of my first time home buyers have asked me if they will be able to write off their closing costs? While there are a few items they maybe able to write off, I always advise them to speak with their tax advisor.
Why? Because most closing cost items are not tax deductible. The IRS consider some costs as natural expenses that comes with purchasing a home and therefore cannot be deducted from taxes. So, while most closing costs are not tax deductible, here are 5 that may be, and can be taken in the year they were paid if you qualify.
Mortgage interest paid at closing.
Mortgage points may be deductible, however there are conditions to be met, For example, the amount must be shown on your closing disclosure and the mortgage loan must be used to purchase your primary resident.
Mortgage insurance
Funding fees
Property taxes
To locate your tax-deductible closing cost amounts, you will need to look at your closing disclosure. You will receive a copy of your closing disclosure at the closing.
Always make sure to speak with your financial or tax advisor if you are unsure. As always, thank you so much for stopping by.
Image by Diana Walton for First Home Houston
