There are numerous tax benefits of homeownership available to filers, according to a Research Briefing Paper released by C.A.R.’s Research and Economics Department. In addition to home equity gains that can be shielded from income tax through the sale of a home, there also are interest and property tax deductions available to homeowners when tax time approaches.

According to the paper, the purchase of a single-family home in California today at the 2005 median price of $524,020 would generate a property tax deduction of approximately $5,240 each year — about 1% of the property value. Over a 12-month period, mortgage interest paid would total $24,470, assuming a 20% downpayment and a mortgage interest rate of 5.87%. That translates into a total tax savings for homeowners in the 25% tax bracket of approximately $7,430 for the first year of homeownership.