Year End Tax Savings

Is there a tax advantage to buying a house before the end of the year?  Yes and no.  While I haven’t heard it lately, it was common in the earlier part of my career to hear a buyer say they wanted to buy before December 31 to realize some income tax savings.  There aren’t any income tax savings, so I was always confused by that, but there can be a property tax advantage in Texas.  Because the homestead exemption kicks in on January 1, if you buy at year’s end, you’ll have it in place the next calendar year, just like someone who bought 11 months earlier than you.  This can be beneficial if we end up in a situation in which property values increase a lot, because you’ll have the 10% cap protection right away.  So while it isn’t a huge property tax benefit most of the time, I can assure it was very beneficial a few years ago.

Post a Comment