Who wouldn't want an ATM in their home that spits out cash when needed? In reality, equity in your home often has great value when in need of cash.
Many use property all the time to tap into cash for multiple reasons. Here are some of the reasons building equity in your home has value from a tax perspective:
1. As a home's value increases, that value is not being taxed. Upon sale, singles get a $250,000 capital gains exemption on profits and couples get a $500k exemption....that's a lot of tax free wealth creation!
2. Home owners who move out of their home and rent it out for at least a year or more, can 1031 exchange that property in a likewise exchange without paying any capital gains taxes if the replacement property is priced the same or more.
3. Wealthier home buyers impacted by limited SALT deduction often close on a property all cash, and then draw out cash via financing for investment purposes. All the interest on that borrowed money is tax deductible, not just the interest on the $750k maximum or the smaller real estate tax tax deduction....
4. In the event you need cash quickly, tapping into your home's equity via a loan could be much cheaper than liquidating an investment that would require you to pay capital gains taxes on that sale. The interest now may be more expensive, yet still cheaper than the capital gains taxes, especially if the assets you would have had to liquidate were owned for a short period of time as short term capital gains taxes are higher. And the interest on HELOC's is usually tax deductible too
Sorry to rub it in, but renters have access to none of the above and is the main reason I encourage and help all those that I can to own a home.