Tax Deductible Interest?

[DisneyDreaming]

My husband and I are thinking of buying into DVC. Is it true that if you finance your DVC purchase through Disney that the interest you pay each year is tax deductible? Thanks!

 

[KCritter]

I was just researching this, since we just bought into DVC ourselves.

The answer is, it depends.

First, you have to itemize your taxes.

Second, you can deduct the mortgage interest on a "qualified second home". According to the IRS a second home is a house, condo, mobile home, boat, etc that has basic living facilities. Your purchase of DVC can count as a qualified second home. However, if you already are deducting for some other second home, you have to choose which one you want to call your second home. In other words, you can only have ONE second home.

The rules get messier if you rent out your qualified second home (ie rent your points). Time to call an accountant if that's your situation.

Hope this helps.

 

[drusba]

As noted above, the answer is generally yes. Another caveat is how you actually finance--the loan needs to be like a mortgage. Through Disney that will always be the case. However if you are buying a resale you may get a loan that is not secured by the property and is just a general unsecured loan that may not qualify for a deduction. Also, you get to deduct the property tax portion of your annual dues (usually in the neighborhood of 20% of your total dues).