Is Homeowner’s Insurance Tax Deductible?

Being a homeowner is far from cheap, but it means you can get some breaks on the taxes that you pay. But can you claim homeowner’s insurance on taxes? The short answer is no, but there are plenty of other costs associated with being a homeowner that are deductible and we’ve collated some of them for your convenience.

Property Tax

Property tax varies from state to state and on the value of your home, but it goes towards the same things as state tax (roads, education etc.), so it makes sense that you can deduct it! A married couple can write off up to $10,000 in property tax, while an individual can write off $5,000.

Home Improvements

Are home upgrades tax deductible? Yes! However, you can’t deduct these improvements every time you make them, rather all at once when you sell your house.

Medical Home Improvements

Some homes need improvements like chair lifts or wheelchair ramps for the sake of accessbility, however while these cost a lot, the cash value they add to a home isn’t massive. You can write off the cost of the improvement minus the value added to your home, so we recommend using a tax specialist to figure out the details.

Energy Efficiency

Making your home energy efficient saves you money on your bills but can also earn you tax credits. Each credit is worth 30% of the cost of your efficiency upgrade.

Mortgage Points

A mortgage point is like a 1% down payment towards your mortgage, paid when you sign the contract. The government making mortgage points tax deductible, while they can also help to lower your interest (0.25% for each point), means these points can save you good money.

Mortgage Insurance

If your mortgage downpayment was less than 20% you’ll likely be required to purchase Private Mortgage Insurance (PMI) in case you default. If your income is less than $109k a year, you should qualify to deduct your PMI payments from your taxes.

Mortgage Interest

However much you spend on interest within your mortgage in a year can also be written off as a tax deductible.

Rentals

If you rent out a room in your home, you can assume it will cost you some money in terms of extra maintenance etc. These costs are thankfully totally tax deductible.

Home Office

If you’re a self-employed, work-from-homer, you can write off business costs as a deductible. This can be anything from internet costs to utilities, which can be written off if properly documented. Some say you can also write off $5 for every square foot of office space that you have, so a 10x20ft home office can be a $1000 tax write off.

Capital Gains

When you sell your house, you’ll pay no capital gains tax on up to $500,000 in profit. Not too shabby!

So no, homeowner’s insurance isn’t tax deductible, but there’s plenty of costs that are!