Many people don’t realize that there’s a difference between what they own personally and what their home owns, and when it comes time to sell, the confusion can cause a lot of problems. Take the period chandelier in your entryway, for example. It’s the perfect example of personal versus real property. So, who does it belong to?

When a buyer purchases a home, they are entering into a contract on real property, or anything that is part of the land or attached to it. But real property can also be something that is considered immovable by law, while personal property, by contrast, is any item that is movable and can be taken from the property. Of course, this can lead to confusion and disputes when the seller considers the chandelier personal property, but the buyer believes it should come along with the house.

Fortunately, there is criteria in place for determining whether something is real or personal property. The law takes into consideration how the item in question (i.e. the chandelier) is attached to the property. Of course, there is still room for interpretation, so it’s important for sellers to list personal property items in the purchase agreement that are to remain with them and give it to the closing agent. Similarly, if there are items they intend to keep with the property, those should be included on a Bill of Sale, which will transfer ownership to the new owners.

Other items that you should consider when selling your home are radiators, appliances, and built-in bookshelves. Because removing these items could cause damage when removed, they are often considered real property. Window treatments also fall within a grey area, so it’s important to clarify whether they will stay with the home or go.

iStock_000008393922XSmallBuying a home is one of the biggest investments you will ever make, but it can also be one of the best if you take advantage of different tax breaks. There are a variety of them available and they can save you big money each year if you’re willing to spend the time itemizing your taxes. Here’s a look at some of the most outstanding tax breaks for home owners!

Mortgage Interest Deduction: One of the best tax breaks for home owners is the Mortgage Interest Deduction (MID). When financing a home, the majority of your monthly mortgage payments go toward the interest, but you can deduct that with Form 1098. Ask your lender for the form, which also explains how much you can deduct.

Energy Star: Not only do Energy Star-rated appliances and fixtures avail you of home owner tax breaks, they can also save you money each month on your utility bills. They cost more money upfront, but the return on investment can be significant for energy-efficient windows, doors and skylights. These items must be installed at your primary residence to take advantage of the deduction, and they have to be in-place by year-end. If you meet the requirements, the tax break is equal to 10 percent of the cost of the products.

Mortgage Insurance Premiums: If your mortgage has a loan-to-value ratio of more than 80 percent, you’re required to carry mortgage insurance to protect the lender against default. Fortunately, you can deduct the expenditure if your adjusted gross income (AGI) is less than $100,000 or $50,000 if you’re married and filing separately. Generally, once you have 20 percent equity in your home, the requirement for mortgage insurance goes away.

Construction Loan Interest: Planning to build a home? If so, you could be able to deduct the interest paid on a construction loan if you qualify. This deduction can be used for the first 24 months of the loan, but it’s permissible for construction to take longer.

Property Taxes: If your property taxes are based on the assessed value of the real property, you would be eligible to deduct both state and local property taxes. This could be a huge savings for you when filing your taxes, but you need to know how you pay your property taxes. If you pay them out-of-pocket, locate your bills to determine the dollar amount. But if you pay them via an escrow account, you can find the information on Form 1098.


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