Benefits of Homeownership

• The first $250,000 to $500,000 in capital gains from the sale of an owner-occupied home is excluded from taxation. Owners also are able to deduct local and state property taxes. There are very few comparable tax breaks for renters, and the few that exist are mostly restricted to low-income families.

• Owners reap the costs and rewards of their own behavior. Those who maintain a house well or make improvements to it will be rewarded when it’s time to sell. That gives both owners and neighbors a strong incentive to invest in their homes, according to a report from the Federal Reserve Bank of Philadelphia. Landlords reap the cost and rewards of tenant behavior in a rental unit.

• More and more corporations are eliminating pension funds and shifting the burden of retirement saving to employees through 401(k) plans, which carry a degree of risk. Those who own their homes outright are in a much better position to stretch a fixed income in their retirement years.

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