Tax Benefits of Owning a Second Home

1. If you decide to buy a second home and that home needs a bit of renovation before you can move in, plan to deduct those home improvements on your taxes. Yes, you can deduct the interest on a home equity loan or a line of credit that you take out to make the improvements needed.
2. Another tax benefit to owning a second home comes in to play if you decide to rent the home out during the seasons when you don’t want to live there.  You only have to rent out your home for 14 days or less over the course of a year to take advantage of these tax benefits.  If you rent out your second home for 14 days or less over the course of a year, the rental income tax is free.  There will also be no limit to what you can charge your tenants per day or per week, the sky is the limit.  This is a great way to take advantage of the tax benefits associated with owning a second home.
3. If you decide to own a second home you may be interested to know that the interest on your mortgage for that home is deductible. As much as 100% of the interest can be written off!  This is exciting news if you were thinking about purchasing a second home.  Many times the tax benefits outweigh the bad that might be associated with owning two homes and may be enough to make you want to go ahead and get started looking for a second home.