If you took out a construction loan to build your new home, you may be able to deduct the interest paid on that loan when you file your taxes. Keep reading to learn more about this and other tax deductions that may be available tax credits for new home construction.

Did You Pay Interest on a Construction Loan?

If you took out a construction loan to build your home, then chances are you paid interest on that loan. You can claim the interest paid on the initial 24 months of that loan when you file your taxes. Keep in mind that this home had to have been either your primary or secondary residence. The deduction only applies to loan limits of $1 million. Also, if you’re married but filing separately, the deduction only applies to the first $500,000 of the loan.

Did You Pay State Sales Tax?

When you purchased building materials, you may have paid state sales tax. If the amount you paid was larger than the amount of your local or state income tax, you can deduct the state sales tax you paid from your federal taxes. This deduction is especially beneficial if you live in a state with no income tax. to learn more about it visit americantaxservice.org

Conclusion:

There are a few different deductions that you may be able to take advantage of if you have recently constructed a new home. Be sure to speak with your accountant or tax preparer to see if you qualify for any of these deductions. By taking advantage of these deductions, you can lower your overall tax liability and keep more money in your pocket.