Home Ownership Worksheet B-Financial Advantages of Home Ownership There are financial advantages that are available to homeowners that are denied to people who do not own homes. These include the following: - Homeowners may deduct the interest they pay on their mortgages from their income when they calculate the amount of federal and state income tax they owe. Homeowners may deduct the property tax they pay from their income when they calculate the amount of federal and state income tax they owe. Homeowners may borrow at lower interest rates using the equity in their homes as collateral. When homeowners borrow against the equity in their homes, the interest they pay may be deducted from their income when they calculate the amount of federal and state income tax they owe. Homes often increase in value over time. When homeowners sell a home for a profit the first $500,000 in profit is not taxed. 1. What does deducting interest and property taxes do to your total tax burden? 2. What is collateral? 3. What is equity? 4. What could you do to increase the value of your home