The Advantages ofThe Advantages ofHome OwnershipHome Ownership

John DoeHigher Learning UniversityProf. Jones, Economics 101

Appreciation, Equity and Appreciation, Equity and PridePride

Appreciation: Homes accrue in value over time

Equity: As the mortgage is paid off, an owner builds equity which can be borrowed against in the future

Pride: The pride and security of ownership is the main reason that people buy homes

Tax AdvantagesTax Advantages

Tax Reports: Interest on mortgages can be deducted on tax reportsIncome Tax: Property taxes paid on real estate that is considered a first home or a vacation home are fully deductibleCapital Gains Tax: If you have lived in your home two to five years and it has accrued in value, either 250K for an individual or 500K for a couple can be excluded from capital gains.

Credit, Stability and Other Credit, Stability and Other IssuesIssues

Establishes Credit: When you buy a home and make your payments on time, it can help you establish strong credit.

Stable Housing Costs: While the prices of rent can inflate, the payments with a fixed APR mortgage stay the same. This makes saving and budgeting easier.

Other Taxes: If your capital gains profits exceed the previously discussed limits, this is a capital asset and is treated preferentially by the IRS.

Works CitedWorks Cited Weintraub, Elizabeth. 2008. “Look at Eight

Reasons to Buy a Home.” About.com. Retrieved April 19, 2008 from: http://homebuying.about.com/od/buyingahome/bb/buyhome.htm.

“First Time Home Buyer: The Advantages of Home Ownership.” 2008. Home Loan Center. Retrieved April 19, 2008 from: http://www.homeloancenter.com/HomePurchase/FirstTimeHomeowners.aspx.

“Should I Rent or Buy? “ n.d. Retrieved April 19, 2008 from: http://www.whyrent.ca/.