1. Capital gains: If you sell your home at a profit, this creates capital gains, which is taxable. According to the tax structure, a married couple filing a joint return does not pay tax on any amount below $500,000. This exemption is restricted to homes sold on or after May 7, 1997. To qualify, the home would have to have been a principal residence for at least two of the previous five years. Unmarried home owners filing individual returns may claim up to $250,000.

Under the old law, owners would have owed taxes on a lesser amount, but it would have been deferred if the sellers bought and occupied another home within 24 months before or after the sale of the old home. Also, home sellers were allowed a one-time only capital gains exclusion of $125,000 if the home had been a principal residence for at least three of the previous five years.

2. Penalty-Free IRA Withdrawal: First-time buyers also benefit from new tax laws. In order to assist new buyers in acquiring a downpayment, Congress passed a provision allowing first-time buyers to withdraw up to $10,000 from their IRA accounts if the money was to be used as a downpayment on a home. This would apply to IRA's owned by the buyers, their parents or their grandparents. In any other situation, early withdrawals from an IRA incur a 10 percent penalty.

3. Mortgage Interest: For joint filing, you can deduct all the interest payments up to a maximum of $1 million in mortgage debt on a first or second home. The maximum is $500,000 for taxpayers filing separately.

4. Points: When you acquire a mortgage there are a variety of additional fees your lender will make you aware of. One of these is called "points," and calculated at 1 percent of the loan principal. These points are a fully deductible mortgage expense.

5. Equity Loan Interest: Some of the interest you pay on a home equity loan or line of credit may be deductible, but there are limits. The total amount is limited to the smaller of:

- $100,000 (or $50,000 for each member of a married couple if they file separately), or

- The total of your home's fair market value - the current value of your home minus any outstanding debts against it.

6. Home Improvement Loan Interest: If you take out a loan to make capital improvements on your home, the interest is deductible. These types of renovations include those that increase a home's value, prolong its life or upgrade it for new uses.

7. Property Taxes: All property taxes are fully deductible from your income.

8. Home Office Deduction: If you allocate a portion of your home for business purposes, you may be able to deduct any home costs relating to that portion. These may include a percentage of the insurance, repairs, heating, and depreciation.

9. Selling Costs: If you sell your home, you can reduce your taxable gain by deducting some of the costs associated with the sale. Recognized deductions include broker's commissions, title insurance, legal fees, advertising costs, inspection fees, and administrative costs. Also, the costs from any home improvements that are made within 90 days of your home sale are recognized as expenses to increase the salability of your home, and are also deductible.

10. Mortgage Tax Credit: The Mortgage Credit Certificate (MCC) is a home-buying program that allows low-income, first-time buyers to qualify for a mortgage interest tax credit of up to 20% of the mortgage interest payments. You have to apply to your local government in advance and if you qualify, the credit is subtracted from the income tax owed.