Under our existing tax code, we are able to deduct the interest and property tax that we pay in any given year from our gross income. This is basically the federal government subsidizing the purchase of our homes, according to Jeff Lowe, Real Estate Professional. Mr. Jeff Lowe, explains it like this. If your initial mortgage is $150,000.00 and your loan is at eight percent then in your first year, you would be paying $9,969.27 in interest alone. Under the tax code, you can reduce your taxable income by $9,969.27. Your property taxes are all deductible thereby your taxable income even more. This is one of the attractive incentives in home ownership and one of the factors that Jeff Lowe, explains to his clients when they are considering buying a home.