Benefits of Owning Your Own Home

   Here's the math...The median price of an existing, single-family detached home in California during March 2005 was $495,400, a 15.7 percent increase over the revised $428,060 median for March 2004, C.A.R. reported Monday, May 2, 2005. The March 2005 median price increased 5.2 percent compared with February's revised $470,920 median price.
   This information in a real-life scenario looks like this: If you were to have purchased a home one year ago for $400,000. In one year the value of your property would be $462,800. If you would have bought the property with 10% down or $40,000, you would have made 57% return on your investment.
   There are, of course, costs that you will have, like mortgages, property taxes and some upkeep. Offsetting some of this is the fact that the government sees mortgage interest, along with points and processing fees as deductibles. Basically, the government is subsidizing your purchase by lowering your tax base. Consult your accountant for more information and to see how this applies to you. (As well, keep in mind that you can only deduct the points you pay if your deposit is larger. For instance, if you buy a home with $5000 in points to purchase a home and the points are to be paid from the loan; If you want to deduct the $5000 you must make a down payment of at least $5000. If you pay only $3000, then only $3000 of the points can be deducted.)

The $500,000 Benefit

   In 1997 Congress passed a terrific law. The general rule is that you may exclude up to $250,000 of gain from the sale of your principal residence ($500,000 if married filing jointly) if you meet the following requirements: You owned the residence for any two of the last five years, you occupied your residence for any two of the last five years or you haven??t used the exclusion within the last two years.