4 States Offering Unique Tax Breaks for New Homeowners

Throughout the United States, real estate prices continue to rise. The average selling price in the United States increased by 5 % over 2024 to $ 434,720, according to RedFin. Meanwhile, the mortgage rates remain relatively high, although the Federal Reserve has recently reduced prices.

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The good news, however, is that there are ways for new home owners to get some relief. In addition to a wide range of federal tax exemptions for home owners – starting from mortgage interest discounts to energy efficiency tax credits – some state governments offer their own tax exemptions to homeowners.

If you decide the country that is the best for your first home, check the best and worst states for home buyers for the first time.

Some countries offer what is known as home exemption, which means that you can reduce the taxable value of your home if this is your basic residence. In Texas, for example, Homestead can be exempt from school provinces of $ 100,000, according to Comptroller.texas.gov.

This does not mean that you are getting a tax break of $ 100,000, but instead, you are subject to tax in a lower amount – for example, taxes will be imposed on a $ 500,000 house at $ 400,000. However, this exemption can provide you with hundreds or even thousands of dollars per year.

In addition, homeowners who are between 65 years old or older or those who are disabled for an additional $ 10,000 exemption.

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Many states offer tax reduction to home buyers for the first time with mortgage credit certificates (MCC), with one example in North Carolina. There, new buyers who have not owned a house as a major stay in the past three years – along with old military warriors – can use a customer center to obtain up to $ 2000 in federal tax credits via the Housing finance Agency in North Carolina.

MCC works by providing this tax credit based on 30 % of the benefits paid on an existing house and 50 % for the newly built home. Remember that tax credit is a direct reduction in the amount due, while the discount reduces the taxable amount. So in states like North Carolina, you may be able to save up to $ 2000 a year only through this tax exemption program.

Another unique way to save taxes in Maryland can be seen via savings accounts for the first time, according to Marylandhomeownership.com. These accounts have been able to have a house in the past seven years to save money for a payment of a qualified saving account, and thus, they can deduct up to $ 5,000 annually as contributions from their government taxes for 10 years.