According to the National Association of Realtors, real estate affordability levels reached their highest point in 42 years, thanks to the reduced home prices and interest rates brought on by the recent crash. Not only is home ownership a great idea because of the affordability, but most homeowners and landlords understand the effect owning has on their tax benefits and savings. New homeowners may be familiar with property tax and mortgage interest write-offs, but there are actually far more benefits for the long-term owner.

Standard Deduction – Everyone is entitled to the standard deduction, and most people would prefer to use this method instead of the more accurate “itemizing.” Homeowners, however, will already have mortgage interest, property insurance and mortgage insurance premiums to write off, which encourage them to itemize their other write-offs.

Points – Points are typically paid instead of paying a higher interest rate over the life of your loan and one point is equivalent to 1% of the mortgage amount. Whether it’s smarter to pay the points of the interest rate depends on a number of factors, but in general, a point paid at closing is fully deductible in that year.

Depreciation – Depreciation is a whole different concept when it comes to real estate savings, as the homeowner is not actually spending the cash represented by the cost of depreciation. It allows investors to take an additional tax deduction, since real estate is believed to wear out over time and will need to be replaced. Depreciation is an accounting concept, and can be best explained by a Certified Public Accountant. If you can buy at the right price, you could even own a cash flowing property that is partially or wholly not taxable.

Profits – For owner occupied homes, if you’ve occupied the home for two of the past five years, much or all of the profits from the sale of the home will be sheltered from capital gains. If the property is owned by joint ownership, up to $500,000 can be protected, and $250,000 for an individual owner. This can be a great advantage for homeowners who bought during a low market and hold onto their property for a profit.

For investors, or non owner occupied homes, sales profits are taxed as long-term capital gains if the property has been owned for at least a year. If you’re interested in learning more, or looking for a home of your own, please contact the Denver real estate agents at PorchLight Realty.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit