While not every homeowner will qualify for every tax deduction, understanding what’s available in 2026 will help you plan, lower your taxable income, and avoid leaving money on the table this upcoming tax season.
This is NewHomeSource’s breakdown of the most common tax deductions and related tax benefits U.S. homeowners may be able to use under current federal tax law.
“There are two big deductions that would apply to most homeowners, so long as they choose to itemize their deductions,” said Nerdwallet financial expert Kate Wood. “The first is mortgage interest, which can include points paid on a new mortgage, since points are prepaid interest.
“The second is state and local property taxes paid, which you'll sometimes see referred to as SALT (State And Local Taxes).”
Beyond these two core deductions, there are several other credits and tax benefits homeowners may be able to take advantage of in 2026.
1. Mortgage Interest Deduction
For many homeowners, the mortgage interest deduction is the biggest tax break available. If you itemize deductions, you can deduct interest paid on a qualified mortgage for your primary residence. The current limit allows homeowners to deduct interest on mortgage debt up to $750,000.
“You can take the mortgage interest deduction on your primary residence and one secondary residence or vacation home,” Wood said. “If you own additional properties or if you rent out your vacation home, that mortgage interest is outside of the scope for this deduction.”
2. State and Local Tax (SALT) Deduction
Homeowners who itemize can deduct certain state and local taxes, including property taxes. Recent tax law changes (The “One Big Beautiful Bill Act”) temporarily increased the SALT deduction cap, allowing eligible taxpayers to deduct a higher combined amount of state income taxes and property taxes in 2026.
3. Private Mortgage Insurance (PMI)
If you put less than 20% down when buying your home, you may be paying private mortgage insurance. For eligible homeowners who itemize deductions, PMI premiums can be treated as deductible mortgage interest.
This benefit is income-limited and may phase out at higher adjusted gross income levels, but it can still provide meaningful savings for first-time and moderate-income buyers.
4. Home Office Deduction
Homeowners who are self-employed or run a business from home may qualify for the home office deduction. To be eligible, the space must be used regularly and exclusively for business purposes.
This deduction allows you to write off a portion of eligible home expenses—such as mortgage interest, utilities, insurance, and depreciation—based on the percentage of your home used for work. While it doesn’t apply to most W-2 employees, it can be a powerful tool for freelancers, consultants, and small business owners.
5. Energy-Efficient Home Improvement Credits
While no new energy-efficiency projects qualify after 2025, homeowners who completed eligible improvements by December 31st, 2025 can still claim these credits on their 2025 returns. You must have the proper documentation (receipts, contracts, etc.) to qualify for this credit.
“The OBBBA eliminated deductions for improving homes' energy efficiency,” Wood said. “This is the last tax year that homeowners will be able to make deductions for energy-related home improvements, like installing solar panels or upgrading windows and doors.”
6. Mortgage Interest Credit Certificates (MCCs)
Some state and local housing agencies offer Mortgage Credit Certificates to eligible buyers, often first-time or lower-income homeowners. An MCC allows you to claim a tax credit for a portion of the mortgage interest you pay each year, reducing your tax bill dollar-for-dollar.
“Homeowners with an MCC can get a tax credit equal to a percentage of their yearly mortgage interest payment, and can still deduct any additional mortgage interest paid,” Wood said. “MCCs can be used each year you have the mortgage, so long as the home is still your primary residence. If you sell the home or refinance the loan, you give up the MCC.”
Itemizing vs. Taking the Standard Deduction
Another important thing to remember: many homeowner tax benefits only apply if you itemize deductions. With the standard deduction remaining relatively high in 2026, some homeowners may find itemizing isn’t worthwhile unless their mortgage interest, property taxes, and other deductions exceed that threshold.
“One consideration, if you're looking at that SALT deduction, is that it's about what you actually paid,” Wood said. “You may have set aside more in escrow than actually got paid out, or if you bought a home this year, the amount of tax you paid is likely less than the annual property taxes, since the home's seller paid for part of the year. You can only deduct the amount that was paid by you to the state or municipality.”
Tax Credits vs. Deductions
Unlike deductions, tax credits directly reduce the amount of tax you owe, making them especially valuable. Proper documentation is essential, so keeping receipts and manufacturer certifications is a necessity.
“Tax credits lower the amount of tax you're paying, while deductions reduce your taxable income — they're both lowering taxes, but from different angles,” Wood said.
The Bottom Line
Tax laws can and have changed considerably, and individual circumstances vary, but understanding which deductions may apply to your situation is a smart starting point for any homeowner.
Whether you’re buying your first home or planning to move in the future, staying informed can help ensure you’re maximizing the benefits of homeownership.
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