6 of the Most Overlooked Homeowner Tax Breaks (and 3 Renovations That Don’t Count)

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If you’re a homeowner, and especially if you only recently bought your property, you could be eligible for some major tax savings. That might not be the reason why you purchased a home in the first place, but it’s a nice bonus.

Just know that not everything related to your home (or renovations) will count. In most cases, you’ll also only be able to claim specific tax breaks if you itemize deductions. So, make sure itemizing would get you more tax savings than the standard deduction.

6 Commonly Overlooked Homeowner Tax Breaks

The average sales price of a new home last year was $498,000, as per the U.S. Census. For many Americans, that’s beyond what they’re financially capable of affording — even with a decent down payment and low-interest mortgage loan.

Even if you purchased your home for less, don’t forget about those nice tax breaks. Some are new for the 2026 tax year, thanks to the One, Big Beautiful Bill (OBBBA). That said, these are the big ones:

• Mortgage interest deduction: You can deduct interest on up to $750,000 ($375,000 if married filing separately) of a mortgage loan used to purchase, build or improve the secured property. This may include home equity lines of credit and home equity loans. As of 2026, private mortgage insurance (PMI) is also tax deductible as mortgage interest, according to H&R Block.
• State and Local Tax deduction (SALT): The maximum limit for this deduction (which includes property taxes) is up to $40,000 (or $20,000 if married filing separately). It’s lower if your income exceeds $500,000.
• Homeowners Association fees (HOA): As a general rule, these are only tax deductible on investment or business properties, per TurboTax.
• Discount points: If you purchased a home using discount points, you may be able to deduct them over the life of the loan (but not all at once). There are exceptions to this. If you used a mortgage to buy your primary residence, for example, you might be able to deduct the full amount of points in the year paid.
• Home office expenses: If you have a dedicated space in your home for work purposes, you may be able to deduct that from your taxes — but only based on the square footage of the property used for that purpose. You’ll typically need to be self-employed or a freelancer for this. Being a remote employee doesn’t count, according to IRS guidelines.
• Tax breaks for homeowners 65 and up: Are you a homeowner who’s at latest 65 years old? From now through 2028, you could qualify for an extra $6,000 tax deduction.

Renovations that Are (And Aren’t) Eligible For Tax Breaks

Home renovations are sometimes eligible for tax breaks, but not always. One that is eligible is energy-related home improvements. So long as you made the improvement after Jan. 1, 2023, you could qualify for a tax credit up to $3,200.

Improvements that are typically eligible for a tax break are those that increase the market value of your property. This might include:

• Energy-efficient heat pumps, central air conditioners, furnaces, biomass stoves or boilers, water heaters
• Energy-generating systems like solar panels (federal tax credit is up to 30% of installation cost)

And ones that don’t usually qualify include:

• Cosmetic changes like a new deck or pool
• Basic maintenance or repairs
• Improvements made to homes not used as a primary residence

Note that home improvements made to your primary residence that are also medically necessary may be eligible for a tax deduction, according to TurboTax. This could include something like an exit ramp or qualifying bathroom modifications.

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