4 Tax Breaks and Write-Offs Homebuyers Who Bought in 2025 Should Know

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Buying a home isn’t cheap. But between new and existing legislation, you could qualify for tax breaks you never knew about. Depending on your situation, you could write off hundreds or even thousands of dollars when you file this year’s taxes.

You’ll typically need to itemize to take advantage of these write-offs, so check if the itemized deduction is higher than the standard one. If it isn’t, you might be better off with the latter. The 2026 standard deduction is $32,000 for married couples filing jointly (or $16,100 for single filers), per the IRS.

Here are four tax breaks and write-offs homebuyers who bought property last year should know about.

State and Local Tax Deduction (SALT)

Thanks to the One Big Beautiful Bill Act (OBBBA), many homeowners are now eligible for a larger SALT deduction than ever before. According to the IRS, the deduction limit is $20,000 ($40,000 for those filing jointly). If your income is greater than $500,000, the limit starts to phase out.

Take note that this federal itemized deduction includes sales, income, real property and personal property tax.

Residential Clean Energy Credit

If you purchased property and made qualifying energy-efficient upgrades in 2025, you could be eligible for a tax credit up to 30% off the installation costs, per the IRS. Potentially eligible systems include solar panels or wind turbines. This credit will fall to 22% in 2033. It’s not available to systems installed in 2026.

Mortgage Interest Deduction

Recently made permanent, the mortgage interest deduction could save you thousands if you itemize. As of this year, the IRS said homeowners can deduct mortgage interest on up to $375,000 ($750,000 if married filing jointly) on a mortgage loan used to buy, build or improve a primary or secondary residence.

Worth noting is that private mortgage insurance (PMI) is now tax deductible as mortgage interest. It’s only fully deductible for those whose adjusted gross income (AGI) is no greater than $100,000, according to the National Association of Realtors (NAR). Still, this is great news for those who bought property in 2025 and ended up getting stuck with PMI.

If you took out a home equity line of credit (HELOC) or home equity loan (HEL) last year, you may also qualify for a tax deduction. This is only if the funds were used to purchase, build or significantly improve the property.

Discount points — or prepaid interest — are an upfront cost some buyers use to lower their mortgage interest rate, per the IRS. If you purchased a home last year using points, you may qualify for a tax write-off. However, most homeowners won’t be able to deduct the full amount of discount points in the first year they buy.

Home Office Deduction

If you’re self-employed, have your own business or are a freelancer, you could qualify for a home office deduction. You’ll need to have a dedicated space in your home for business-related purposes. You can also only deduct a specific amount from your taxes (and again, only if you itemize), according to the IRS.

You have two options for this tax break:

• Simplified IRS method — Deduct $5 per square foot of home office space (up to 300 square feet) for a maximum of $1,500
• Regular method — Calculate the exact deduction by dividing home expenses between business and personal use.

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