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    YogendrahVir's Avatar
    YogendrahVir Posts: 1, Reputation: 1
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    #1

    May 2, 2007, 05:58 AM
    Income tax rebate on housing loan.
    Hi,

    I would like to know what is the income tax rebate that I can get On the housing loan.
    I have recently bought a property and took housing loan for the same. The property is in the form of Two 1 Bhk Flats adjacent to each other which I wish to join together later.
    So on what princiapal and interest I would be eligible for rebate under the income tax clause. Can I claim rebate for both of my houses or is it only for one, If its only for one then is there any benefit that I can avail on the second flat.

    Regards,

    Yogendrah Vir
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    May 2, 2007, 06:28 AM
    Under the U.S. income tax system, you do not get a "rebate" on your housing loan. You deduct the mortgage loan interest and real estate taxes on the properties in question as an itemized deduction.

    Yes, you CAN deduct the interest and taxes on BOTH flats as itemized deductions. If you rent one of the flats, then the mortgage interest and real estate taxes are switched from itemized deductions (Schedule A) to Schedule E, which is used to report your rental income and the other rental expenses.

    How MUCH you save using these deductions depends on your tax bracket.
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