Tax Benefits of a VA Home Loan

Owning a home has incredible financial benefits. For one, instead of paying money to someone else for rent, you put money back into your pocket by building equity. And if you’re a military service member or veteran, a VA home loan also has additional advantages. One of them is the tax benefits that’ll be available to you.

Tax Write-Offs

With a VA loan, you typically can claim origination fees, discount points, and mortgage interest deductions. Your mortgage interest will be especially important in the first few years of homeownership because most of your payments go toward interest at this time.

Mortgage Interest Deduction

If you used a VA loan to refinance your previous mortgage, you might still qualify for some deductions. For example, when you use your cash from refinancing to pay down credit card debts, you may have the opportunity to claim a mortgage interest deduction.

And there’s an added bonus. Replacing credit card debt with cash from refinancing effectively transfers or consolidates the debt into a much lower interest rate than credit card interest rates.

Energy-Efficient and Solar Tax Credits

Most people know about the solar tax credit. It first gained popularity at the federal level but has since expanded at the state level in several regions across America. California probably offers the most robust incentives for adding solar to the home. There are also other tax credits provided to homeowners for making energy-efficient improvements, such as:

  • Better home insulation
  • Energy-efficient skylights, windows, and doors
  • Energy-efficient air conditioning systems
  • Biofuel stove installations
  • Natural gas or propane water heaters

Tax-Free Real Estate Sales

When most people sell their homes, they pay taxes on the gains. Qualifying VA loan homeowners can avoid those taxes. Individuals can sell their homes tax-free at a sale price of $250,000 or less. For married couples, this climbs to $500,000. Homeowners can continue to do this every two years.

The ability to sell tax-free is beneficial for active duty service members who may be reassigned to new locations regularly. It provides peace of mind that each new move may result in capital gains instead of tax liabilities.

Get VA Home Loan Benefits

At National Home Loans, we encourage our future homeowners to work closely with financial professionals to take advantage of all possible tax write-offs. You can significantly reduce tax liabilities and it’ll balance the initial costs of purchasing and owning a home. Contact us today so that you can take advantage of these incredible tax benefits in the next filing season.

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Written By

John Giannattasio

John Giannattasio is an independent mortgage broker based in San Diego. He brings a wealth of diverse business knowledge and experience to his mortgage practice, which results in a stress-free, seamless, and strategic experience for his clients.

Estimate Your Savings

Hero Reward:
$6,300

Home Price:
$8,40,000

Amount shown is an estimate for a hero buyer purchasing a home with a Homes for Heroes real estate and mortgage specialist. Hero Rewards may vary.*

Start Saving Now
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