Which is better to close in December or January for the property taxes

Closing in December:Tax Deduction for Current Year:If you close in December, you may be able to deduct property taxes and mortgage interest on your current year’s tax return. This can reduce your taxable income and potentially lower your overall tax liability.Pro-rated Taxes:At closing, you’ll typically reimburse the seller for property taxes they’ve already paid for the portion of the year you’ll own the property. This means a smaller tax payment upfront, but you assume responsibility for the next year’s taxes sooner.Year-End Benefits:Closing before year-end allows you to claim homeowner tax benefits for the entire current year.Potential Rush:December closings can be rushed due to holidays and year-end demands on lenders, inspectors, and title companies.Closing in January:Tax Deduction Delayed:By closing in January, deductions for property taxes and mortgage interest won’t be available until the next tax year. This delays potential tax benefits.Budgeting Advantage:You won’t owe property taxes until the next payment cycle. This could ease your initial cash flow needs.Avoiding Holiday Rush:January closings may be less hectic, allowing for smoother scheduling and fewer delays.Aligning with Annual Financial Goals:Closing at the start of a new year may align better with budgeting or investment planning.Key Considerations:State and Local Tax Timing: Check when property taxes are due in your area and whether payments are made in arrears (for the past year) or advance.Tax Planning: Consider whether you need deductions this year or prefer them next year based on your financial situation.Market Conditions: Interest rates and property prices may vary at year-end or beginning, which could influence your decision.Consulting with your real estate agent, lender, and tax advisor will help you decide based on your specific financial and tax situation.tune in and learn  at https: //www.ddamortgage.com/blogdidier malagies nmls#212566dda mortgage nmls#324329 Support the show