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Your mortgage and property tax payments provide a substantial income tax savings (this is one of the major benefits associated with real estate ownership).  Because of income tax deductions, the government is basically subsidizing your purchase of your home.  All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.  Yes, property taxes are deductable too!  Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.  Mortgage payments for the first several years of your loan are applied mostly to interest owed so you will have a substantial interest deduction on your taxable income for many years.

When you are purchasing a new home, it is important that you have a good understanding of all the tax benefits associated with it.  Your accountant or tax advisor can easily provide you with accurate figures regarding the amount of money you can expect to save on your income tax through homeownership.  Calculations are based on your individual tax bracket, the total amount of interest you are paying each year on your mortgage and the amount of property tax you pay on a yearly basis.  Some areas of Orange County also have Mello-Roos taxes which can increase your property taxes significantly (Mello-Roos taxes vary in each community as they are not based on property value - click on the link for more detailed information on Mello-Roos taxes).  

Please feel free to contact me directly if you have any additional questions regarding real estate taxes or if you need a referral for a qualified tax advisor.  Take some time to review the real estate tax resources below for additional information.