Tax Benefits Just For You! A Homeowner!

🧾 Tax Benefits of Owning a Home in 2025

How Homeownership Could Help You Save Big This Tax Season

It’s that time of year we’re gathering documents, reviewing deductions, and figuring out how to (hopefully) get that big refund. If you’re a homeowner, don’t forget there are several tax benefits that could put thousands back in your pocket.

And if you’re currently renting, buying a home in 2025 could be your ticket to more than just stability — it could also mean serious tax perks.

Here’s a quick rundown of key homeowner tax benefits to be aware of. (As always, check with your tax advisor to see what applies to your situation. This isn’t tax advice just a helpful heads-up.)

🏡 Mortgage Interest Deduction
If you bought your home before Dec 16, 2017, you can deduct interest on up to $1 million in mortgage debt.

For loans taken after that date, the limit is $750,000.

You’ll need to itemize your deductions to claim this so compare it to the standard deduction ($14,600 single / $29,200 married filing jointly in 2025) to see what saves you more.

🧾 Property Tax Deduction

• Property taxes on real estate are fully deductible up to the IRS limits.
• If you reimbursed the seller for prepaid taxes when you bought your home, you may be able to deduct that too check your settlement statement.

🌱 Credit for Green Home Improvements

You may be eligible for up to $500 in federal tax credits for upgrades like energy-efficient water heaters, windows, roofing, or HVAC systems.

This is a credit, not a deduction which means it’s a direct reduction of your tax bill.

🏘️ Rental/Investment Property Deductions

• If you own a rental, you can deduct many expenses, including:
  • Mortgage interest
  • Repairs & maintenance
  • Insurance, utilities, advertising, and property management fees
  • Depreciation (a non-cash deduction that’s often overlooked)
• Short-term tax-free rental income: If you rent your primary home for 14 days or fewer in a year, the income is generally tax-free.

💼 Home Office Deduction

• If you’re self-employed or operate a business from home, you may be eligible to deduct qualified home office expenses.
• Your home office must be used regularly and exclusively for business and be your primary place of business.
• W-2 employees are no longer eligible for this deduction under the current tax code.

⚠️ This one can be tricky and is known to raise red flags with the IRS. Make sure to talk to your accountant before claiming it.

💰 Capital Gains Exclusion (Primary Residence)

• Sold your primary residence? You may be able to exclude up to $250,000 in capital gains if you’re single, or $500,000 if married filing jointly as long as you lived in the home for at least 2 of the last 5 years.
• Selling an investment property? You might qualify for a 1031 exchange to defer paying taxes on the gain. Let me know if you want an intro to a 1031 expert.

📞 Want Help or an Accountant Referral?

If you’re unsure what applies to you or you don’t currently have a tax professional just reach out! I’d be happy to connect you with a few trusted accountants I know in the Los Angeles and South Bay area.

📧 Email: james.daniel@exprealty.com
📱 Text/Call: (562) 286-1735

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