You have probably heard that owning a second home provides some tax relief. There are some special tax rules and regulations that apply to second properties. Aside from the numerous beneifts of owning a second home here are four tax breaks as well:

1. Mortgage Interest – When it comes to owning a second home, the interest on your mortgage is deductible. The same rules that come with writing off mortgage interest for your first home apply to your second.

2. Home Improvements – Is your second home a fixer-upper? If you want to spend the off-season making improvements to your hideaway, you can deduct the interest on a home equity loan or line of credit.There are a couple of exceptions.

• For starters, there will be a limit on the amount you can deduct if the home equity loan on your main or second home is more than $50,000 if filing single or $100,000 if married or filing jointly.
• Second, the amount you can deduct has a limit if the mortgage is more than the fair market value of the home.

For example, let’s say a taxpayer has a mortgage of $620,000 and takes out a home equity loan of $65,000. The property’s fair market value is $675,000. Since the difference between the fair market value and the mortgage is $55,000, then $55,000 of the home equity loan can be deducted, not the full $65,000.

3. Property Taxes – You can also deduct your second home’s property taxes, which are based on the assessed value of the home. That’s good news. Even better news? Unlike the mortgage interest tax deduction, there’s no dollar limit on the amount of real estate taxes that can be deducted on any number of homes owned by the taxpayer.

4. When it’s time to sell – Maybe you bought a far-off hideaway that you’re lucky to visit a couple of times a year. Or perhaps your vacation home is just a quick drive away, and you spend every possible moment there.

If it’s the latter—and you don’t already know which of your homes is your primary residence and which is the second home—now’s the time to figure it out. Distinguishing between the two can have big tax implications when it comes time to sell.

That’s because a capital gain of up to $250,000 (or $500,000 for taxpayers who are married/ joint filers) on the sale of the principal residence may be excluded from taxable income.

Your principal—or primary—residence is the home you used most during the five years prior to the sale. But other factors—such as your job’s location, voter registration address, and banking location—could also come into play. Among other requirements, you must own and use that principal residence for at least two of the five years before the home is sold.

This article is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. Consult your professional tax and/or financial planner before making any decisions.