Is Homeowner’s Insurance Tax Deductible? What Is (and Isn’t) Deductible
Written by
Rudri Patel
Edited by
Joe Evans
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If you’re a homeowner trying to trim your tax bill, you might be wondering: Is homeowners’ insurance tax-deductible? For most people, the answer is no. But there are a few exceptions where you might be able to write off part of your premium, especially if you use your home for business or rental income.
In this guide, we’ll break down when homeowners’ insurance can — and can’t — be deducted, how to file it correctly and what other home-related tax breaks you should know about.
Can You Deduct Homeowner’s Insurance on Taxes?
Generally, homeowner’s insurance for your primary residence is not tax-deductible. The IRS treats it as a personal expense, and personal costs aren’t eligible for deductions on your federal return.
According to the National Association of Insurance Commissioners (NAIC), the average U.S. homeowner pays about $1,428 per year in insurance premiums.
That’s a big expense, but unless your home is generating income, you probably won’t get a tax break.
When Is Homeowner’s Insurance Not Deductible?
You can’t deduct homeowner’s insurance if:
- You live in the home full-time
- The space is used only for personal reasons
- You don’t qualify for any business or rental exemptions
Even if your mortgage lender requires insurance, the premiums are still considered a nondeductible personal cost under current IRS rules.
When Can Homeowners’ Insurance Be Deducted?
There are two key cases when homeowners’ insurance may be deductible:
1. You Rent Out Your Property
If your property earns rental income, the cost of insurance becomes a business expense.
- Claim it on Schedule E
- Deduct 100% of the premium if the home is fully rented
- If it’s only partially rented (like a basement apartment), deduct a percentage based on square footage
According to the U.S. Census Bureau, roughly 44 million U.S. households were renters in 2023, and many landlords were homeowners renting out portions of their primary home.
2. You Use Your Home for Business
If you’re self-employed and use part of your home as a dedicated office space, you may be eligible to deduct part of your insurance premium.
- The space must be used regularly and exclusively for work
- Claim the deduction on Schedule C
Home Office Deduction Methods:
| Method | Description | Max Deduction |
|---|---|---|
| Simplified | $5 per square foot, up to 300 sq. ft. | $1,500 |
| Regular | Business-use percentage of actual expenses | Based on % |
According to the Pew Research Center, about 15 million Americans work from home full-time, making the home office deduction increasingly relevant. Using the regular method, someone with a 200-square-foot office in a 2,000-square-foot home could deduct 10% of insurance and utility bills.
How to Deduct Homeowners’ Insurance for Rental Properties
If you rent out your home, follow these steps:
- Determine rental use: Full property or partial?
- Track expenses: Keep records of insurance, repairs, depreciation, and maintenance
- Report on Schedule E: Categorize each expense accurately
- Keep documentation: Save receipts and lease agreements
More than 10.6 million Americans reported rental income to the IRS in 2023, according to IRS data.
Can You Deduct Homeowner’s Insurance for a Home Office?
Yes, but only if you meet specific IRS criteria:
- You’re self-employed (W-2 employees generally don’t qualify)
- The space is used exclusively for business purposes
- You claim expenses using Schedule C
You can choose between the simplified method (flat $5 per sq. ft.) or the regular method (percentage of home expenses).
According to the Small Business Administration, home-based businesses generated over $500 billion in U.S. revenue in 2023, showing how important these tax breaks can be for entrepreneurs.
Other Tax Deductions for Homeowners
Even if you can’t deduct your insurance, you might qualify for these home-related tax perks:
- Mortgage interest (up to $750,000 loan balance)
- Property taxes (up to $10,000 with SALT limit)
- Private mortgage insurance (PMI) (deduction expired but may return)
- Home office deductions (if qualified)
- Capital improvements (used to lower capital gains taxes when selling)
Nearly 87% of tax filers who itemize claim mortgage interest or property tax deductions, according to the Tax Policy Center. Learn more about what home improvements qualify for tax credits and deductions.
Final Take to GO: What to Remember About Deducting Homeowner’s Insurance
- Homeowner’s insurance isn’t deductible for personal use
- It may be deductible if part of your home is used for business or rented out
- File with Schedule C (business) or Schedule E (rental)
- Other home-related tax breaks include mortgage interest and property taxes
- Keep all records and consult a tax pro if you’re unsure about eligibility
Next step: Take a look at how you used your home last year — if you rented it out or worked from a home office, you may be leaving money on the table without realizing it.
FAQ
Here are the answers to some of the most frequently asked questions about if homeowner's insurance is tax-deductible and how it works:- Can I deduct homeowner’s insurance if I’m self-employed?
- Yes, if you qualify for the home office deduction and use the space exclusively for work.
- Where do I report homeowners’ insurance on my tax return?
- Use Schedule E for rental properties or Schedule C for home office deductions.
- Is mortgage insurance deductible?
- Currently, it isn’t for most taxpayers, but future legislation could reinstate the deduction.
- What if I rent out a room in my home?
- You can deduct the portion of insurance expenses that apply to the rented area.
- Can I deduct insurance for a vacation rental I only rent part-time?
- Yes, but only for the days the property was available for rent. Personal-use days don’t qualify.
Data is accurate as of August 5, 2025, and is subject to change.
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- IRS "Topic no. 504, Home mortgage points"
- NC Department of Insurance. "A CONSUMER’S GUIDE TO PRIVATE MORTGAGE INSURANCE"
- IRS "About Schedule E (Form 1040), Supplemental Income and Loss"
- IRS "How small business owners can deduct their home office from their taxes"
- IRS "Topic no. 515, Casualty, disaster, and theft losses"
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- Pew Research Center "About a third of U.S. workers who can work from home now do so all the time"
- Pew Research Center "As national eviction ban expires, a look at who rents and who owns in the U.S."
- U.S. Chamber of Commerce "Getting Ready to File? Tax Deductions For Home-Based Businesses"
- Tax Policy Center "Who Benefits From The Mortgage Interest Deduction And Who Misses Out?"
