Massachusetts Real Estate

When borrowing money to buy a home, there are certain deductions that you are afforded by the ole tax man that you should be aware of come tax time in April. The following are some of the deductions you may forget about when buying a home:

POINTS ~ Points on a home loan are tax deductable if they are used to bring down the mortgage interest rate. For those that don't know a point is 1% of the loan amount. On a $200,000 mortgage a point would equal $2000.00. You would only want to pay points on a loan if you knew your were going to be in the home for a while.

In order to understand if paying points makes sense you need to calculate the mortgage payment amount with and without points. By looking at the spread between those amounts you can determine how long you would need to be in the house before it would pay off for you.

Getting back to points, origination charges that constitute a "service fee" are not tax deductible.

PRO RATED MORTGAGE INTEREST

When you are buying a home depending on when in the month the home sale closes, the buyers pay either a small or large amount of pro-rated mortgage interest for the month in which they close. Whether it's large or small, a home buyer can write that amount off. The Final Closing/Settlement Statement will show just how much the buyer is due.

PRO RATED REAL ESTATE TAXES                                                                                                                                            

Often times a seller will send the local tax collector's office a check for Real Estate taxes prior to the closing. In many circumstances, however, the buyer pays a pro-rated portion of the taxes for the year at closing. This is one that is often forgotten.

NEW HOME CONSTRUCTION LOAN INTEREST

As long as the construction period doesn't last more than two years before you make the new home your "principal residence," you can write off the interest for that new construction loan.

PRE PAYMENT PENALTIES

Although most home loans today do not have pre-payment penalties on rare occasions you will still find one. If your loan does have a pre-payment penalty and you do pay off the loan early, these penalties are tax deductable.

 

 

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The above information on tax deductions to remember when getting a home loan was provided by Bill Gassett, the team leader for the #4 RE/MAX Team in Massachusetts in 2007. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 22+ Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.

I have a passion for Real Estate and love to share my marketing expertise! I would welcome the opportunity to earn your business.

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Home Sales. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Metrowest Real Estate profile.

 

 

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Most in Massachusetts would never think there are actually tax programs available to save you money. After all we didn't get the name "Taxachusetts" for nothing.

Lately, it seems everywhere you turn there is bad news. The local Real Estate market has been down in the dumps, the stock market has taken a fairly big hit, the cost of oil and energy in general is out of sight, and there is talk of a recession.

With the exception of historically low mortgage interest rates, there have not been many reasons to get overly excited by the present shape of our economy.

Taxes have been an issue for years in Massachusetts. Especially some of the towns located in Metrowest MA that have had extremely high property appreciation rates.

Up until the last few years Real Estate in Metrowest Massachusetts was booming. Along with the increase in property values came higher tax bills. This has become a wide spread problem for the elderly and those on fixed incomes.

In Massachusetts there are programs available to help those in need of tax relief.

There are a few programs worth discussing including clause 41c for elderly residents, clause 17d which is an exemption for seniors, surviving spouses, and minors, clause 22 covering veterans, clause 37a which covers the blind and two others know as the Circuit Breaker and the standard tax deferral.

Below is an explanation of each one of these exemptions:

Clause 41C - Clause 41c is for elderly residents. Residents who are 65 years old by July 1 may qualify for a $1000 dollar tax credit. The income requirements for this program if single are $23,718 per year and assets not in excess of $40,000. If you are married the income requirement is less than $35,578 and assets not is excess of $55,000. The other requirement with 41c is that you have to be living in Massachusetts for the last ten years and owning/occupying property for the last five.

Clause 17D - Clause 17d is an exemption in the amount of $208.39. In order to qualify for 17d a senior must be 70 years old by July 1 and surviving spouses must be a widow or widower by July 1. For a minor to qualify for this program they must have a deceased parent and own the property. In all of these circumstances the total worth may not exceed $40,000 excluding assessed home value.

Clause 22 - There are various exemptions for veterans and their spouses ranging from $400-$1000. In order to qualify you must have certification of a war related disability and also not have been dishonorably discharged.

Clause 37A - Clause 37a applies to those who are legally blind as of July 1. The tax credit is $500. In order to qualify you must also be registered with The Massachusetts Commission for the blind.

 

Tax Deferral- Residents 65 years or older can defer all or a portion of their taxes at a rate of 5% interest. In order to qualify residents must have lived in MASS for the past ten years and owned/occupied their home for the last five years. Gross annual income must not exceed $40,000. This a a program that not many people are aware of. In my home town of Hopkinton MA the town places when the deferral is approved and payment is made upon the sale of the home.

The Circuit Breaker - This exemption is available to residents age 65 and over whose property taxes exceed 10% of their income. This figure includes water and sewer bills.

 

These are great programs that are available in Hopkinton MA and other Metrowest Massachusetts communities. I suspect that if more people knew about these options they would take advantage of them. Hopefully a few people will read this and I will end up saving them a few dollars.

It would be great if there were other programs such as these that more people in Metrowest Massachusetts could take advantage of. The cost of living here is high and there are others besides seniors who could use the help. 

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About the Author: The above Real Estate information for Massachusetts Property Tax Relief was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of Hopkinton MA and other Metrowest towns for the last 23+ Years.

Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

Selling your home in Metrowest Massachusetts see Metrowest Massachusetts Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest MA: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Franklin, Northbridge, Uxbridge, and Framingham MA.

 

Click here to view Bill Gassett's Real Estate profile

 

Subscribe in a reader

 

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

 

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.