Is Home Insurance Tax Deductible?

7th Aug 2025

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Owning a home means managing a range of costs, from monthly mortgage payments to routine repairs. One of those expenses is homeowners insurance, which, unfortunately, isn’t usually tax deductible.

That said, owning a home does come with some useful tax breaks, especially if you itemize your deductions. Here's what you need to know to possibly lower your tax bill.

Is Homeowners Insurance Tax Deductible?

Generally, no. If you live in your home and don’t earn any income from it, you can’t deduct your homeowners insurance premiums.

However, if you rent out part of your property, say, through Airbnb or a similar platform, or use it as a home office for your business, a portion of your premiums might be deductible. The exact amount depends on your situation, so it’s best to speak with a tax advisor.

If your home is purely an investment property, you can deduct the full cost of your insurance as a business expense.

Also note: private mortgage insurance (PMI) is separate from homeowners insurance and can be tax deductible. PMI protects your lender in case you default on your loan.

9 Tax Deductions Homeowners Should Be Aware About

Here are the main deductions and credits to explore as a homeowner:

1. Mortgage Points Deduction

If you paid for mortgage points at closing, you might be able to deduct them. These points (which cost 1% of your loan per point) help lower your interest rate. You can usually deduct the full amount in the year you purchased them, just use Form 1098 from your lender and report it on line 10 of Schedule A (Form 1040). Limitations may apply if your loan exceeds $750,000.

2. Mortgage Interest Deduction

You can also deduct the interest paid on your mortgage, up to $750,000 in loan value, on both your primary and second homes. This figure is also found on your Form 1098 and gets reported on Schedule A.

3. Property Tax Deduction

Annual property taxes can also be written off, up to $10,000 if filing jointly (or $5,000 for single or separate filers). These taxes cover local services like schools and roads. You’ll claim this on Schedule A as well.

4. Rental Deductions

Renting out a portion of your home (garage apartment, spare room, etc.) means you’ll owe tax on that rental income, but you can also deduct related costs like repairs, insurance, and utilities. Just report these on Schedule E of Form 1040 and deduct those expenses from your rental earnings.

5. Home Office Deduction

If you’re self-employed and use a part of your home exclusively for business, you may qualify for a home office deduction. You can either calculate actual costs (utilities, maintenance, internet) or use a simplified option: $5 per square foot of office space (up to 300 sq. ft.). Just keep records, and be sure you meet IRS requirements.

6. Home Improvement (Capital Improvements)

While home repairs aren’t deductible, major improvements that add value, like a new roof, AC system, garage, or security system, can boost your home’s cost basis. This helps reduce capital gains taxes if you sell the home later. Keep all receipts for these improvements and consult with a tax pro to ensure they qualify.

7. Energy-Efficient Upgrades

Green upgrades like solar panels, geothermal pumps, or solar water heaters may qualify for the Residential Renewable Energy tax credit. The Inflation Reduction Act of 2022 also introduced stronger incentives for homeowners who switch to cleaner energy sources.

8. Accessibility Improvements

If you renovate your home to improve access for a household member with a disability, you might be able to deduct those costs. IRS Publication 502 outlines the rules. You can deduct these costs (minus any increase in home value due to the improvement). For business owners, there are ADA-specific tax incentives as well.

9. Capital Gains Tax Exclusion

When selling your home, you may be able to avoid paying capital gains tax on your profits, up to $500,000 if you file jointly, or $250,000 if filing as an individual. To qualify, you must have lived in and owned the home for at least two of the last five years, and not claimed the exclusion on another home sale in the past two years.

What About the Standard Deduction?

Many homeowners skip itemizing and take the standard deduction instead. For 2023, those amounts are:

Bottom Line

Homeowners insurance premiums usually aren’t deductible, unless you use the home to generate income. But even if you can’t write off your premiums, there are still many tax benefits to owning a home. Whether it’s mortgage interest, property taxes, or energy-efficient upgrades, the right strategy can help you save.

Want to learn more about how to make homeownership for you? Sistar Mortgage has resources to guide you every step of the way.