Key takeaways
Tax season can spark a much-needed money talk for new homeowners.
Mortgage interest and property taxes are major deductions, but the rules and limits matter.
Deductions and credits can save you even more, and a checklist helps you keep track of what qualifies.
We thought the hard part was over once we closed on our first home.
Then tax season hit.
Our mortgage statement made one thing clear: homeownership doesn’t just change your monthly payment — it changes your tax return. What qualifies? What doesn’t? What should we be tracking? So we had the “money talk.”
If you’re a new homeowner, here’s what you need to know
The Obvious Ones
Property taxes are deductible — but there’s a limit. The IRS caps the combined state and local tax (SALT) deduction, including property taxes, at $40,000 per year for tax years 2025–2029. If you live in a high-tax state, that cap can matter.
Your lender sends a mortgage interest statement each January for the prior year. That interest is deductible (within legal limits) if you itemize your deductions — and for many new homeowners, it’s the largest deduction they’ll claim.
To deduct mortgage interest or property taxes, you’ll need to itemize instead of taking the standard deduction. Make sure your total itemized deductions exceed the standard deduction before deciding.
The Ones You Might Miss
Here’s where homeowners often leave money on the table.
Energy-efficient upgrades
If you added solar panels, heat pumps, insulation, or new windows after moving in, you may qualify for a federal tax credit worth up to 30% of what you spent. Unlike deductions, credits reduce your tax bill dollar for dollar — and you don’t have to itemize to claim them.
Mortgage points
Mortgage interest deductions come with limits and eligibility rules. Make sure your total itemized deductions exceed the standard deduction before deciding.
Private mortgage insurance (PMI)
If you put down less than 20%, you’re probably paying PMI. While premiums aren’t deductible for 2025, they’re scheduled to be deductible starting in tax year 2026.
Home office deduction
If you’re self-employed and use part of your home regularly and exclusively for business, you may qualify for a home office deduction.
Between the obvious deductions and the ones people overlook, you now have a clearer picture of how homeownership can affect your tax return.
That kitchen table money talk? This checklist pulls it together.
New Homeowner Checklist
Put the Checklist to Work
You tracked everything down — now see how much your new home could save you with our Life Events Calculator.
