If you’ve purchased a new Minneapolis home in the last year, you may be asking about your tax deductions in 2018. There’s no doubt about it - it’s beneficial to understand your tax benefits now that you’re a home owner. One of the frequent questions we get asked is…”Is our title insurance tax deductible?” If you’ve been asking the same question, we’ve got you covered with this short blog post.
What is title insurance?
If you’re still in the process of buying your home, you may need to start with what title insurance covers. Title insurance is need for many real estate transactions and will protect you, as the buyer, from any undisclosed claims on the title of your new home. These can include:
Undisclosed previous heir to the property
Judgments against the title/property
Title companies will typically investigate your home’s title prior to issuing a title insurance policy to ensure there are no claims on your property and your closing goes smoothly.
How much does title insurance cost?
The cost of your title insurance policy will depend on the cost of the home you are purchasing and what state the home sits in. It’s best to contact your title insurance company for a specific quote. Try our fee calculator for an estimate on your costs.
Is title insurance tax deductible?
The short answer is no. Your title insurance cost is not tax deductible. However, you can add the cost of title insurance to the cost basis of your home which can save you on taxes when you sell the home.
Capitalizing your title insurance cost
Capitalizing your title insurance cost is simply adding this amount to the cost basis of your home. This can help you save when you go to sell as it will reduce your capital gains.
Consult your tax professional
Don’t take our word for it - we’re the experts in title insurance. Consult your tax professional and research the latest tax regulations.
If you’re ready to purchase a new home and are looking to learn more about title insurance, we’re here to help. We work with individual buyers, real estate agents, and mortgage lenders to give you peace of mind throughout the closing process.