The Tax Implications of Owning a Home

Buying a home is a major milestone—and a major financial commitment. But while your mortgage may give you heartburn some months, it can also offer some tax relief. Here’s what every homeowner should know about the tax landscape beyond 2025.

1. Mortgage Interest Deduction
Yes, this classic deduction still exists—but with a few caveats. As of 2025 and beyond, you can deduct interest on mortgage debt up to $750,000 (or $375,000 if married filing separately) for loans taken out after December 15, 2017. Older loans may be grandfathered in at the $1 million cap.

Heads up: This deduction is only available if you itemize, so it may not apply if you’re taking the standard deduction.

2. Property Tax Deduction (with a SALT-y Limit)
You can deduct state and local taxes (SALT)—including property taxes—but the deduction is capped at $10,000 ($5,000 if married filing separately). This limit was introduced under the 2017 Tax Cuts and Jobs Act and is still in effect unless Congress changes it.

In high-tax states, this cap can really bite—worth planning around if you’re buying or refinancing.

3. Home Equity Loan Interest—Still Deductible, But…
Interest on home equity loans and lines of credit is deductible only if the funds are used to buy, build, or substantially improve the home that secures the loan. That kitchen remodel? Probably deductible. Paying off credit cards? Not so much.

Always document how you use home equity funds—just in case the IRS asks.

4. Home Office Deduction
Work from home? If you’re self-employed, you may qualify for a home office deduction. You can deduct a portion of home expenses (mortgage interest, utilities, depreciation) based on the square footage used for business.

Note: Employees working remotely for a company generally can’t claim this deduction under current rules.

5. Capital Gains Exclusion on Home Sales
Thinking of selling? If you’ve lived in your home for at least 2 of the past 5 years, you can exclude up to $250,000 of capital gain from the sale if single—or $500,000 if married filing jointly.

This is one of the best tax breaks out there—plan wisely to qualify!

6. Moving Expenses? Not for Most
Prior to 2018, job-related moves could be deducted. But for now, only active-duty military members moving under orders can deduct moving expenses. For everyone else, this one’s off the table.

Sorry, civilians—you’ll have to eat those U-Haul costs.

Final Word from Jennifer
Owning a home is one of the few life choices that can build wealth and unlock tax perks—but only if you know what you’re doing. Stay informed, keep receipts, and when in doubt, give your tax pro a call.

Want to maximize your homeowner deductions this year? Let’s talk—we’re just a call or click away.