If death and taxes are the two things you can always count on in life, there probably should be a third: the bucketful of tax breaks Uncle Sam offers every year to encourage more Americans to buy a home.
For one, Americans are able write off virtually all mortgage interest, not only for your primary home, but for a second home as well under some conditions — up to $1.1 million of debt when you include home-equity loans that are used for certain personal expenditures, such as funding college education. In most cases, homeowners are also able to write off their property taxes.
All told, homeowners (65% of Americans in 2013, down from an all-time high of 69% in 2004) have opportunities for dozens more federal income tax deductions than renters. In fact, only 21 states and the District of Columbia offer renters any kind of tax breaks or credits — generally credits for what is considered to be the percentage of property taxes that is rolled into a rent payment. (In Maryland, the state calculates that 15% of a monthly rental payment actually represents payments for property tax by the landlord and that increased property taxes are passed on to tenants in the form of increased rents.) Other states offer property tax credits to low-income households when the property tax payments exceed a certain ratio compared to their income.
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