Owning a Home Can Save You Thousands in Taxes

Buying a home is a big milestone, but it also comes with some new financial responsibilities—especially when tax season rolls around. The good news? Home ownership can unlock tax breaks that could save you thousands each year. From deductions on mortgage interest to credits for energy-efficient upgrades, understanding the tax benefits of owning a home can help you make the most of your investment.

One of the biggest perks is the mortgage interest deduction. If you itemize your taxes, you can deduct the interest you pay on your mortgage—up to $750,000 of loan debt if you bought after 2017. This deduction alone can mean serious savings over the years. Another big one is the property tax deduction, allowing you to deduct up to $10,000 in state and local property taxes.

If you’ve tapped into your home’s equity with a home equity loan or HELOC, you can also deduct the interest—if the funds were used for home improvements. Planning to sell in the future? The capital gains exclusion means you won’t pay taxes on up to $250,000 in profits ($500,000 for married couples) when selling your home, as long as you meet residency requirements.

For those working from home, the home office deduction can reduce taxable income by covering a portion of expenses like mortgage interest and utilities. And if you’ve recently made your home more energy-efficient, the Renewable Energy Credit could give you back 30% of the cost of solar panels or other qualifying systems.

Home ownership isn’t just about having a place to call your own—it’s also full of opportunities to save money. By taking advantage of the right tax deductions and credits, you can make the most of your investment while keeping more of your hard-earned cash.