Buying a Home
Buying a House soon? Don’t Skip This Tax Conversation First
Buying a home is a big move financially, emotionally, if you’ve been living in a 600-square-foot apartment near for the past couple years. And while most people get caught up in mortgage rates, inspections, and whether they can squeeze a king bed into the guest room, there’s one thing they often overlook: the tax side of things.
I’ve seen this happen more times than I can count, people miss out on deductions, get blindsided by unexpected bills, or just don’t understand how homeownership changes their tax life. So let’s fix that.
The Mortgage Interest Deduction—Still Alive and Well (Mostly)
Yes, you can still deduct mortgage interest on your tax return BUT only if you itemize. With the Big Beautiful Bill just passed in July 2025, the standard deduction was increased again (now $31,500 for married couples and around $15,750 for single filers), so fewer people will cross the threshold where itemizing makes sense.
But in high-cost markets like Denver, New Orleans, or Miami your mortgage interest could still tip the scales. If you’re paying $3,000–$4,000/month on your mortgage, a good chunk of that first year is going toward interest and that might be deductible if your total itemized deductions beat the standard deduction.
So it’s worth running the numbers with someone who actually knows how to calculate that.
Property Taxes—Deductible, But Capped
In metro areas like Denver or Miami, you’re still easily paying $3,000–$5,000 a year in real estate taxes.
Under the new tax bill, the SALT cap was increased to $40,000, which means you can now deduct a lot more of your state and local taxes, including those property tax payments. Previously, you were capped at $10,000, which made this deduction almost meaningless for many. Now, it’s worth paying attention to.
Home Office? There’s a Deduction for That.
If you’re working from home (about 36 million people currently are), you might qualify for a home office deduction. The biggest and main qualifying factor is that you are a contract employee or have your own little side hustle going on. Sadly, if you're a W-2 employee, this does not apply to you.
That little corner you turned into a Zoom zone could be worth a few hundred, or even a few thousand, dollars a year on your tax return. You just have to document it properly and choose between the simplified or actual expense method.
Energy Efficiency = Tax Credits
Metro homeowners are big on green energy. If you install solar panels, upgrade your HVAC system, or make energy-efficient improvements to your home, you may qualify for federal tax credits under the Energy Efficient Home Improvement Credit. These credits aren’t just deductions, they’re dollar-for-dollar reductions in your tax bill, and can add up fast.
Closing Costs: What You Can and Can’t Deduct
Many people think they can write off every closing cost. Most fees related to your mortgage (like loan origination fees, title insurance, and appraisal costs) aren’t directly deductible.
What is deductible? Points paid to buy down your interest rate and certain prepaid interest charges. It’s a narrow list, but if you financed a big chunk of your purchase, even a few hundred in deductible costs can make a difference.
Here’s the Move: Talk Taxes Before You Close
Too many people talk to a real estate agent, a lender, and a moving company, but never a tax pro. Don’t wait until April to realize you left deductions on the table or didn’t plan for the impact of property taxes and mortgage interest on your overall tax picture.
Thinking of buying in this year?
Before you sign the dotted line, talk with a tax pro to know the full picture.