Top Tax Deductions Every Homeowner Should Know in 2025
Owning a home comes with powerful tax benefits — from deducting property taxes and mortgage interest to writing off a dedicated home office space. These deductions can help lower your taxable income and put more money back in your pocket each year!
Intrigued? Keep reading.
(3 minute read)
Home Ownership Perks:
Tax Deductions You Don’t Want to Miss
Buying a home isn’t just a major life milestone — it also opens the door to some serious tax benefits. Whether you're a first-time homeowner or have been in your place for a while, it’s worth understanding the deductions that can put money back in your pocket. These aren't loopholes — they’re legitimate homeowner perks designed to reward you for investing in your space and community.
Here are a few key tax deductions every homeowner should know about:
🧾 1. Property Tax Deduction
Your annual property taxes can usually be written off on your federal tax return — and that adds up. Homeowners can deduct up to $10,000 ($5,000 if married filing separately) for a combination of property and either state/local income or sales taxes.
👉 Pro tip: Even if your lender handles property taxes through escrow, you’re still eligible to deduct them.
🏠 2. Mortgage Interest Deduction
This is one of the biggest tax advantages for homeowners — especially in the early years of your mortgage, when most of your monthly payment goes toward interest. You can deduct interest on up to $750,000 of mortgage debt if you’re filing jointly.
💡 If you refinanced, that interest may still qualify — just make sure to keep records of the loan details.
💻 3. Home Office Deduction
If you work from home and use a dedicated space solely for business purposes, you may qualify for a home office deduction. This can include a percentage of your rent or mortgage, utilities, internet, and even repairs made to the workspace.
There are two methods:
Simplified: $5 per square foot (up to 300 sq ft)
Actual expense: A percentage of your home expenses based on the size of your office
📌 Note: This deduction is typically for self-employed individuals or small business owners, not W-2 employees — unless you fall into a specific category.
👀 Don’t Miss These Too:
Energy-efficient home upgrades (like solar panels, energy-efficient windows, etc.) can also come with tax credits.
Private mortgage insurance (PMI) may be deductible in some cases — check with a CPA for the latest guidance.
Points paid when buying or refinancing a home can sometimes be deducted too!
Final Thoughts
I always say homeownership is about building equity — but it's also about building opportunity. The tax benefits are just one more way owning a home can be a smart long-term move.
As always, I’m not a CPA — so it’s smart to talk to a tax professional who can tailor this to your specific situation. But if you have questions about buying, selling, or making the most of your homeownership journey, we’re always here.
Here’s to turning your home into your greatest asset — both emotionally and financially. 💪
Jennifer Carey
Realtor and Agent Success Manager at Open House Austin, real estate investor, and renovation enthusiast with Wimberley Airbnbs. She loves mid-century modern design, hiking Austin with her dogs, yoga and pilates, and has been enjoying gardening at her new home in East Austin🎶✨
