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Taxable deductions; are any associated w/ home purchasing?

We are deciding to rent/or buy in the UK. West of London...what are the incentives to purchase? Are any costs associated with a purchase or interest paid on a mortgage deductible? In the U.S. both are yes. I am hoping something is there to motivate a person to purchase a home over rent... Thanks. Jana Jones USA resident

Asked on Jan 18 2010, Home Finance in Feltham | Report content

Answers (1)

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  • No obvious fixed benefits as such with a main residence! Most people in the UK base their choice on renting -v- buying simply on will the market increase over a few years and see some good capital growth on their purchase. 5% interest on your bank savings will not be as good as 5% increase on the full house purchase price (assuming you have less cash in the bank than the price of house you are looking to buy), so all things being equal it is often better to purchase! HOWEVER anyone who purchased in mid 2007 rather than renting may disagree as the market turned upside down. At present the UK market seems to be recovering and the signs are good. I personally would rather not pay rent which is dead money, especially as if you have a 25% plus deposit some mortgage deals are far cheaper than monthly rent amounts being asked. (dependant on purchase price) So if the market does rise you could make money, On the other hand if it does drop then you could argue £1.000 per month in rent is basically loosing £12,000 a year! which you will not get back if the market ever picks up!

    Answered on Jan 18 2010, Report content

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