Further, the property should appreciate in value each year, further adding to equity (what the house could be sold for versus what is owed on it). Notwithstanding certain blip periods such as the 2006 housing bubble burst and the 2022 housing boom, home prices in the U.S. appreciate nationally at an average annual rate between 3% and 5% (home value appreciation in different metro areas can appreciate at markedly different rates than the national average). Improvements increase your home’s value. A homeowner can also increase a home’s value through home improvements, thus both making your home more comfortable and enjoyable while growing its loan-to-value (LTV) ratio. For instance, adding a bathroom or adding an additional room substantially increases the property’s functionality and appeal, while potentially boosting its value. Tax advantages of home ownership. There are significant tax benefits associated with buying a house, both at the time of purchase and for the duration of time you own the home: • Homestead exemption. Many states exempt owner- occupied homes (homesteads) from a portion of the property tax amount that would normally accrue. For instance, Florida exempts the up to $50,000 of a home’s value from property tax assessments. Please see Florida Department of Revenue's website for more information. • Federal tax deductions. When you’re looking to purchase a home, it’s important to understand what can be deducted on your tax return and what can’t. Property taxes and interest paid on your mortgage can be deducted if you itemize your federal income taxes, which can reduce your income tax burden. Many home buyers, unfortunately, overlook the effect of mortgage interest on
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