Owning a home can offer certain tax benefits that help reduce the cost of owning a home. The IRS recommends that homeowners and prospective buyers review these benefits to determine if they meet the requirements to take advantage of them.

Deduction of mortgage interest

If you have a mortgage loan to buy, build, or substantially improve your primary residence or a second home, you may be able to deduct the interest paid. To claim this benefit, you usually need to itemize your deductions on your tax return.

Property taxes

In some cases, state and local property taxes may be deductible, provided that the taxpayer meets the requirements set by the IRS and details his or her deductions.

Expenses that are not deductible

Not all expenses related to a home qualify for a tax benefit. Generally, payments for homeowners insurance, utility bills, HOA dues, and maintenance or repair costs are not deductible for a primary residence.

Keep your records

The IRS recommends keeping documents related to the purchase of the home, improvements made, mortgage payments, and property taxes. These records can be important when preparing your tax return or when you sell the home in the future.

Consult the IRS resources

Before filing your tax return, check to see if you meet the requirements for any of the available tax benefits. The IRS offers publications and tools to help homeowners understand the deductions and other housing-related benefits.

Knowing these benefits and maintaining a good organization of your documents can help you save money and properly fulfill your tax obligations.