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SANTA CRUZ SENTINEL WHO'S WHO IN REAL ESTATE THURSDAY, MARCH 31, 2016 9 continued from pg. 7 Property taxes Everyone knows that being a homeowner means pay- ing taxes on your property to local government, whether that's the city, county or local school district. What you might not know is that these taxes are entirely deductible from your federal income tax. That's good news for homeowners, and it's another tax advantage that rent- ers don't enjoy. Mortgage insurance premium deduction It's no secret that affordability is a major issue for prospec- tive homebuyers. Prices continue to rise in markets around the country, while obstacles to saving — such as student loan debt — make it harder to build that down payment. That makes low-down-payment options — available from the Federal Housing Administration and others — at- tractive, but it's important to remember that the FHA re- quires the purchase of mortgage insurance on all loans. And even with a conventional loan, chances are if you put down less than 20%, your lender will require mortgage in- surance as well. Mortgage insurance is simply a means for lenders to protect against the risk of a default on the loan, but it means higher costs for the borrower. The good news? You can deduct mortgage insurance from your federal income taxes as an itemized deduction up to an adjusted gross income of $109,000 ($54,500 if married filing separately), provided other conditions are met. That's no small thing. What about home sellers? Homebuyers aren't the only winners. Let's imagine you bought a home back in 2010 for $250,000 but got a job offer across the country, and now it's time to make a move. Maybe you've done some home improvements, and the market has improved. Now, a REALTOR® thinks you can reasonably list your home for $300,000. You follow his or her advice, and boom, you receive and accept an offer for the listing price. You just put a hefty profit in your pocket, but the bene- fit doesn't stop there. Those capital gains are entirely free from federal income tax, up to $250,000 for individuals and $500,000 for joint filers. Is there another investment in your portfolio that can say the same? What's right for you? These are just a few of the tax advantages for which home- owners are eligible. There also are incentives for "greening" a home, depreciation allowances for rental space or a home office, and more. But it's important to remember that these aren't "loopholes." These tax benefits reflect America's long- standing belief that homeownership builds and strength- ens families, neighborhoods and communities. Affordable homes can be hard to come by, and tight in- ventory means competition is stiff. Add on closing costs, insurance, maintenance, a hefty down payment and other challenges, and suddenly it can be daunting. These tax in- centives keep the dream of homeownership alive for all creditworthy buyers. Buying a home is a big decision, and for many people it's the largest single investment they'll make throughout their lives. Renting has its perks, and you have to decide for yourself when it's the right time to buy. Just know that when you do, there's help in the tax code to get there. Tom Salomone is president of the National Association of REAL- TORS®. Copyright NATIONAL ASSOCIATION OF REALTORS®. Re- printed with permission.