There are many tax benefits built into home ownership. Here’s a summary of the most common. It may be worth a quick review to ensure you are maximizing your home ownership tax benefits.

Common deductions

Interest deductibility. Mortgage interest is one of the few allowed deductible interest expenses. It is limited to the first $750,000 dollars in loans secured by your primary residence ($1 million for mortgages underwritten prior to 2018). You may also deduct points paid as an itemized deduction over the life of your mortgage.

Bonus: You can also deduct interest on a second home.

Home office. A qualified home office also creates a deductible expense. There’s also a safe harbor calculation that makes it easy to get this tax deduction.

Property taxes. Your property taxes are also allowed as an itemized deduction. Current tax laws limit this deduction along with other taxes to $40,400 in 2026 ($40,000 for 2025) whether you are married or single.

Free rental income. You can rent out your home for up to two weeks and not claim the income. This is a great tax break if your home is located next to a popular landmark or major event. Many taxpayers rent out their vacation home for two weeks to help reduce the cost of their home away from home.

Home mortgage insurance. Premiums paid for home mortgage insurance are also deductible once again beginning in 2026.

More home benefits!

Capital gain exclusion. Perhaps the best tax benefit of home ownership is receiving tax-free gains. When you sell property for a profit, it generally creates a taxable event. However if the property is your primary residence, you can exclude up to $250,000 ($500,000 for married couples) of these gains. While special rules do apply, this exclusion is a major tax benefit of home ownership.

Better than renting. Home values can feel like a roller coaster ride with a few sharp turns. When interest rates climb, prices tend to cool off. But zoom out, and real estate has historically trended upward, rewarding those who stay in for the long haul. For most people, owning a primary home still makes solid financial sense, and remains a smart move to factor into long-term tax planning.

Category: Deductions	Published: 02/20/2026