From the time when civilizations began to flourish, it has been the diktat’s pleasure to levy taxes and the people’s pleasure to evade them. Since evasion is an unlawful activity, finding a way of not paying taxes while staying within the legal boundaries is known as tax advantage and for a long time real estate investment has been viewed upon as an effective tax savior.
Amongst the many ways by which investing in real estate can help to save on taxes, one of them entails converting a portion of your house into an office. Maintenance of office space within the residential premises makes the owner privy to legal tax deductions as long as it is concerned with real estate work only. A certain percentage of household bills incurred during the month like phone, office furniture, stationary and mortgage payments can also be deducted by operating a home office.
Another way in which people derive tax benefits from real estate investments is by tying the property to a fixed rate long-term investment instead of making an outright purchase. This is because the interest paid on the mortgage loan is deductible from the tax point of view and thus results in substantial savings in the long run. Likewise, any expenditure which is incurred on the property in form of repairs or maintenance is also tax deductible.