Your home provides many tax benefits—from the time you buy it right on through to when you decide to sell.
Mortgage Interest
If you itemize your deductions, interest that you pay on your mortgage is tax deductible. The limit is $750,000 loan limit and is scheduled to end 2025.
Property Taxes
You can tax deduct your property taxes up to $10,000 per year. This applies for single and married tax payers.
Home Office Deduction
A portion of your home exclusively used for business purposes may be deductible. To deduct home costs related to that portion, such as a percentage of your insurance and repair costs, and depreciation.
Capital Gain Exclusion
Married tax payers who file jointly get to keep up to $500,000 tax free in profit on the sale of the home. Single taxpayers can keep up to $250,000 tax free. Some restrictions apply, see also Tax Facts You Should Know.
Selling Costs
If you decide to sell your home, you’ll be able to reduce your taxable capital gain by the amount of your selling costs.
Real estate broker’s commissions, title insurance, legal fees, advertising costs, administrative costs, escrow fees, and inspection fees are all considered selling costs. All selling costs are deducted from your gain.
Real Estate Deduction Information
For more information on real estate tax laws, visit IRS.gov. You’ll find basic information for first-time homeowners (IRS Publication 530) and publications about selling your house (IRS Publication 523), business use of your home (Publication 587), moving expenses (Publication 521), and home mortgage interest deductions (Publication 936).
