Deductible Home Buying Expenses May 2026

: You can deduct interest paid on up to $750,000 of mortgage debt ($375,000 if married filing separately) for a first or second home.

This limit applies to loans taken out after December 15, 2017.

This cap is reduced to $20,000 for those who are married and filing separately. deductible home buying expenses

Understanding Your Deductible Home Buying Expenses Buying a home is one of the largest financial commitments you'll make, but it also opens the door to significant tax advantages. While many of your upfront closing costs are non-deductible in the year you purchase, several key expenses can lower your tax bill if you choose to rather than take the standard deduction. Primary Deductible Expenses

Check your settlement statement for any pro-rated property taxes you reimbursed to the seller at closing; these are often deductible even if they aren't on your Form 1098. : You can deduct interest paid on up

Interest on home equity loans is only deductible if the funds were used to buy, build, or substantially improve the home securing the loan.

: State and local real estate taxes (SALT) are deductible up to a combined total of $40,000 through 2028. Understanding Your Deductible Home Buying Expenses Buying a

Topic no. 504, Home mortgage points | Internal Revenue Service