In the United States, a majority of state and local governments charge real estate taxes. This can be described as an annual charge by a taxing authority, as a percentage of the value of your real estate property. The tax is deducted by the established taxing authority, based on the estimated property value. Your home will provide you with several tax benefits all through it’s cycle; from the time you buy it, to when you make the decision to sell. This leaves some future home buyers considering, what are all the tax deductions available for home owners?
When it comes to managing your taxes, it is essential to remember that home ownership affords you a vast array of options in tax deductions. A great and knowledgeable realtor will be able to help you understand this further.
Importance of Tax Deductions
Tax deductions are defined as a reduction in the taxable income of an individual. Therefore, with a tax deduction, the estimated taxable portion of your home’s value will go down. Through proper planning and organization, you will be able to make significant steps towards increasing your savings. In Charleston, South Carolina, once you have paid all taxes due, you can claim a tax deduction.The Charleston County Assessor’s Office is responsible for real estate taxes, as well as the benefits, credits, and deductions associated with it.
For tax purposes, a property seller in Charleston is required to pay the real estate taxes up to the date of sale. After this, the buyer will pay the taxes for the period commencing on the date of purchase. It is important for you as the buyer to find out if the previous owner carried any delinquent taxes. Delinquent taxes are unpaid penalties and taxes charged by a taxing authority on a seller for an expired tax year. Therefore, agreeing to pay these taxes will make it impossible for you to claim deductions because they are considered part of your home’s cost.
Applicable Situations for Tax Deductions
As an actual or potential homeowner in Charleston, there are items that are considered as not deductible from taxes such as transfer charges and service charges. However, there are several situations where you are eligible to receive a real estate tax deduction. Some of the most common circumstances include:
This applies in a situation where you have relocated and moved to Charleston because of a new job. The move has to be at least 50 miles from your previous city of residence. Calculating the cost of your move and keeping relevant receipts will enable you to deduct the costs from your taxes.
It is possible that a natural disaster could end up affecting your home and damaging it accordingly; damage that may not be covered by your insurance. Receiving federal aid in the case of property damage caused by a natural disaster will put you in a position to claim a tax deduction. Rest assured though, this is not nearly as much of an issue in Charleston as soon may make it out to be (thanks Hurricane Matthew!)
Being self-employed or having a home office will increase your likelihood of receiving a tax deduction. These deductions will be achieved from qualified business expenses stemming from rent, career memberships, utilities, work vehicles, and equipment.
Installing green energy equipment as a form of alternative energy (or for energy efficiency) can put you in a position to qualify for deductions. In Charleston, you can get a 30% refund as a renewable energy tax credit. This is for purchases on environmentally-friendly or energy efficient items such as solar, wind, and geothermal technology.
If you receive a tax refund for your real estate taxes, it is necessary to reduce your deductions in proportion to the amount refunded. As a homeowner, it is recommended that you learn more about property taxes in order to expand your savings, as well as understand the benefits available to you in Charleston.
Your options and choices are vast in Charleston, be sure to work with a great realtor!