Owing a home can be very beneficial: You can deduct your mortgage interest and real estate taxes while you own your home, get tax free treatment when you rent your home and exclude gains from the sale of your home.

Home mortgage interest deduction

In general, interest paid on your home are tax deductible. This includes the initial loan to buy your home, a second mortgage, a line of credit, or a home equity loan. The purpose of the loan could be to buy, build or substantially improve your main or second home. You can deduct the interests up to $1million.

Property taxes

You can deduct the property taxes on your home. This also includes your vacation home.

Tax free home rentals

Did you know you could rent your home or vacation home for a limited time and pay no taxes on the rental income? To qualify for this tax free treatment, you must

• Rent out your home for 14 days or less
• Personally use the home for 15 days or more

It does not matter if the home is your primary home, second home or vacation home. This rule comes in handy for those who live in highly desirable areas where renting your home while on vacation is quite common.

The other side of the coin is you do not get to deduct your rental expenses. For example if you had to place an ad, the cost of the ad is not deductible: Nothing is filed with your tax return. You should continue to deduct your mortgage interest and real estate taxes as you have always done.

Selling your home

You can exclude up to $250,000 ($500,000 if married) of gain from the sale of your home. To qualify you must:

• Own and occupy the home as your principal residence for at least 2 years before you sell it
• The two years must occur within the 5 years window of making the sale. You do not have to live in the home when you sell. The ownership and use of the home do not have to overlap.

These are some of the tax breaks for owning your home. Owning a home could be quite beneficial and the tax implications of owning should be taken into consideration before buying a home.