{"id":56636,"date":"2026-04-28T10:40:20","date_gmt":"2026-04-28T17:40:20","guid":{"rendered":"https:\/\/www.redfin.com\/blog\/?p=56636"},"modified":"2026-04-28T10:49:14","modified_gmt":"2026-04-28T17:49:14","slug":"tax-breaks-for-homeowners","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/blog\/tax-breaks-for-homeowners\/","title":{"rendered":"Tax Breaks for Homeowners: 8 Ways to Save on Your Taxes"},"content":{"rendered":"
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From <\/span>property taxes<\/span><\/a> to upgrades and maintenance, the <\/span>costs of buying<\/span><\/a> and owning a home can add up quickly. The good news is that some of these expenses can help lower your tax bill. There are several tax breaks for homeowners to take advantage of if you know where to look. Below, we\u2019ll explain each one so you can better understand how these deductions and credits may reduce your overall tax burden.<\/span><\/p>\n

Before we proceed, keep in mind that you need to itemize your deductions to take advantage of these tax breaks. If you opt for the standard deduction, these do not apply.<\/span><\/p>\n

1. Tax credits for efficient home upgrades<\/span><\/h2>\n

Home improvement projects can improve the safety and functionality of your living space, but they can also be beneficial for tax purposes. Home upgrades that improve your home\u2019s energy efficiency can qualify you for a tax credit of up to $3,200. Energy-efficient home upgrades like exterior doors and skylights can account for up to $1,200 in credits, while the remaining $2,000 can count toward things like qualified heat pumps and water heaters. Because this is a tax credit (not a deduction), it directly reduces the amount of tax you owe.<\/span><\/p>\n

2. Mortgage interest tax breaks<\/span><\/h2>\n

If you choose to itemize your deductions, you can reduce your taxable income by deducting the interest from your mortgage payments. Your total interest payments for the year will appear on your Form 1098. Married couples filing jointly can deduct interest on the first $750,000 of their home\u2019s value. If the home was purchased before 2017, that limit is $1 million. This deduction lowers your taxable income, which may reduce the amount you owe in taxes.<\/span><\/p>\n

3. Property tax deductions<\/span><\/h2>\n

Homeowners are allowed to deduct property taxes from their federal return. Couples who file jointly can deduct up to $10,000, while those filing separately can deduct $5,000. This is especially beneficial in states like New York and New Jersey, which have some of the <\/span>highest property tax<\/span><\/a> payments in the country. Keep in mind this falls under the SALT (state and local tax) deduction cap.<\/span><\/p>\n

4. Home equity loan or HELOC deductions<\/span><\/h2>\n

Home equity loans<\/span><\/a> and <\/span>home equity lines of credit (HELOC)<\/span><\/a> are both financing options that are secured by the equity you\u2019ve built up in your home. Similar to mortgage interest, the IRS allows you to deduct interest payments from these. However, this deduction only applies if the funds are used to buy, build, or substantially improve the home securing the loan. This deduction also applies to the first $750,000 of your mortgage. When eligible, this can help reduce your taxable income.<\/span><\/p>\n

5. Home office tax breaks<\/span><\/h2>\n

For those who are self-employed and work from home, you can use your home office to lower your tax bill. As long as it meets IRS requirements, you can use your home office to deduct from your utilities, insurance, and property taxes based on the percentage of your house\u2019s square footage that is occupied by the office.\u00a0<\/span><\/p>\n

For example, an office that takes up 6% of your home\u2019s area would allow you to deduct 6%.\u00a0<\/span><\/p>\n

Keep in mind that in order to qualify for this tax break, your office must meet the following requirements:<\/span><\/p>\n