How Your Santa Cruz Home Can Save You Money Come Tax Time

Posted by Lauren Spencer on Thursday, February 28th, 2013 at 1:01am.

April 15th seems a long way off, but it will be here before you know it. Now is the perfect time to start getting your ducks in a row — and your paperwork too. Owning real estate can make a big difference on your tax return, so make sure that you’re taking advantage of all the deductions you’re entitled to. We’ve outlined a few below.

Mortgage Interest
Unless you paid cash for your purchase, you probably took out a loan to buy your Santa Cruz home. Mortgage interest is one of the best tax deductions out there, so be sure to hang on to that 1098 form from your bank. You can almost always deduct the entire amount of interest paid per calendar year.

Real Estate Taxes
Depending on where your property is located, you are likely paying real estate tax, either to the state or to a local governing authority. Taxes based on property value are generally deductible as well. You may have an escrow account to hold these funds during the year, so be sure that you only deduct the amount of taxes you actually paid.

Home Equity Line of Credit
You may deduct home equity debt interest as long as you are legally liable to pay the interest, the interest is paid in the tax year, and the debt is secured by your Santa Cruz home. The home equity debt has a limit of up to $100,000 ($50,000 if married filing separately).

Mortgage Insurance Premiums
Depending on how your loan is structured, you may have mortgage insurance, which is another allowable deduction.

Mortgage Interest on Land
If you purchased land with the intent to build, the interest you have paid may qualify as deductible mortgage interest as long as the structure becomes your qualified residence within a 24-month period.

Your Santa Cruz home could be one of your greatest resources for reducing your tax liability. If any of the situations above apply to you, be sure to itemize your deductions on a Schedule A (Form 1040) when you prepare your taxes this year.

Please call me at 831.662.6522 or email me at for more information on buying, selling and real estate tax deductions.

For additional real estate information, please visit my home page at


Mortgage Interest

Home Equity Line of Credit

Mortgage Interest on Land



About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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