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What IS Deductible? Interest on your mortgage. Whether you pay it to a lender or to a home seller or other party, interest on your mortgage is deductible as long as it's for debt secured by real property.
Property Taxes Your property taxes are completely deductible, but special government fees such as water or sewer assesment may not be deductible.
Loan Points Points are fully deductible for a purchase mortgage in the year that you pay them. In a refinance, you write off the points in increments over the term of the loan. That is not recommended because people probably will not own the home long enough to be worthwhile, but contact your legal or real estate office before making your final decision.
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