Convenience
· Dishwasher, refrigerators, microwave and other appliances can be built-in for convenience.

· New home have more electrical outlets, cable television outlets, telephone and computer wiring.

· There are more full and half bathes with features such as vanity cabinets, large mirrors and medicine cabinets, whirlpool tubs and easy-to-clean plastic tub enclosures.

· Windows are usually easier to clean and are more energy efficient.

· Modern floor plans provide efficient living space.

Safety
· Many new homes have hard-wired smoke detectors on every level. Usually, they are interconnected so that if one detector alarm sounds, they all sound.

· Electrical power systems in new homes are properly sized for the heavier electrical demands of today's homes.

· There also are more receptacles so people need fewer extension cords which can overload circuits, trip people and start fires if they become worn and frayed.

· Ground fault interrupters for bathrooms, kitchens, and outside receptacles reduce the chance of fire and electrocution.

· Glass in tub enclosures and patio doors in new homes must be tempered so that it will crumble if broken instead of shattering into large jagged pieces that can seriously injure people.

Health
· Asbestos has been eliminated from shingles, pipe, cement board, roof tar, floor tiles, ceiling tiles and insulation.

· Lead can cause a wide range of physical and mental ailments. It is not used as an ingredient in paint anymore, and it is no longer used as solder for plumbing.

· Formaldehyde emissions from particle board and hardwood plywood have been greatly reduced in new homes.

· Urea-formaldehyde finishes on most kitchen cabinets are now baked or cured to minimize emissions.

· Builders are now installing systems to control radon gas where it is a problem. These systems usually include installation of gravel and polyethylene film beneath basement floors and concrete slabs, and provide for later installation of vent pipes and fans, if required.

Energy Efficiency
· Better windows, more efficient heating and cooling equipment, better control of air infiltration, and greater use of insulation reduce energy consumption to about half as much energy as homes built prior to 1980.

· Drafts, frost and condensation on windows and walls are unlikely to occur in a new home.

Maintenance Free
· New homes are available with siding, windows and trim that never need painting.

· Wood decks are typically made of pressure-treated lumber which resists rot and insects.

· Pressure-treated wood is also used where wood comes in contact with concrete

Tax Advantages of Home Ownership

Homeownership can be an excellent investment and a very good tax break. Following is a summary of the federal tax laws regarding home ownership. This summary is general in nature; please consult a CPA or attorney for guidance in your specific situation.

Interest on home mortgage:

Interest paid on a primary residence is generally tax deductible. This reduces the cost of homeownership. The following example shows how:

This example assumes that the taxpayer itemizes deductions, and has taxable income of $55,000, and is in the 28% federal tax bracket. Higher incomes can receive a higher benefit, as tax rates can exceed 40%.

The tax benefit is calculated as follows: Determine the interest and principal portions of the payment. In this example, the interest portion is $964. Multiple the interest portion by the tax rate (28% in this case) to arrive at the deductible amount ($270). Your CPA or attorney can help you determine your tax bracket, as well as calculate your estimated tax savings.

Capital Gains Exclusion:

Married homeowners do not have to pay taxes on up to $500,000 in capital gains realized on the sale of their homes. The $500,000 provision applies to married homeowners filing joint returns and is restricted to homes sold on or after May 7, 1997. To qualify, the home would have to have been used as a principal residence for at least two of the previous five years. Taxpayers who file individual returns may claim up to $250,000.

According to the previous rules, the tax on any profit would be deferred if the sellers of the home bought and occupied another home of equal or greater purchase price within 24 months before or 24 months after the sale of the old residence.

The previous law also allowed for a one-time capital gains exclusion. Home sellers who were at least 55 years old could realize a tax-free gain of up to $125,000 if the home had been used as a principal residence for at least three of the previous five years.

Under the old law, home sellers could use their capital gains exclusion only once after turning 55. Under the new law, people over 55 who have already used their exclusion can take advantage of the new tax provisions, assuming that they have occupied their new residence for at least two of the previous five years.

First Time Homeowners:

First-time buyers also benefited from a special provision of the new tax law. One of the largest obstacles to homeownership usually is the inability of potential first-time buyers to save enough money for a downpayment. In 1997, Congress passed a new provision allowing first-time buyers to withdraw up to $10,000 from their IRA accounts if the money is used for a downpayment on a home. The penalty-free provision can be applied to IRAs owned by the buyers, their parents or their grandparents. Under current law, early withdrawals from an IRA incur a 10 percent penalty.

Many lenders offer special programs for first time buyers that feature very low down payments. These programs maximize the tax benefits of home ownership as most of the purchase price is financed. Of course, the homeowner builds up equity more slowly due to the small down payment.