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8 Tax Breaks for Homeowners That Don't Involve Your Mortgage

There are several additional tax breaks available to homeowners. Find out who qualifies for these perks.

By Chris Kissell

Edited by Lisa Dammeyer

Updated Jan. 13, 2026

When you think of tax breaks related to owning property, chances are good that the mortgage interest deduction leaps to mind. However, this is not the only tax break available to homeowners.

Many other tax breaks exist that can help you keep more money in your pocket and grow your wealth over time. Here are some of the tax breaks homeowners can enjoy that don't involve their mortgage.

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Home office deduction

Folks who are self-employed can claim a deduction for a space in their home if it is used exclusively for business. Unfortunately, it is not available to remote workers who are employed by a company.

To qualify for the deduction, the space you use must be "a specific area of your home only for your trade or business." You cannot use the space for any other purpose.

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Tax-free short-term rental income

The IRS allows you to rent out a home you normally use as a dwelling unit and keep any rental income tax-free so long as you rent it for fewer than 15 days each year.

People who live in desirable vacation areas or near an annual event that draws people from elsewhere can make a tidy tax-free sum thanks to this provision. That can put you on the right track to build wealth.

"House hacking" deductions

"House hacking" is a term that describes when a person lives in part of a property but also rents out a portion of it. For example, you might live in the main part of a home, but rent out the basement, a garage apartment, or an accessory dwelling unit (ADU).

Expenses are deductible if they are related to the rental portion of your property. Depending on your situation, you might be able to deduct a portion of property taxes, repairs and maintenance, utilities and expenses, and more.

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Property tax deductions

You can deduct up to $40,000 of the state and local property taxes on your primary residence and other properties you own when filing your federal tax return.

However, what many homeowners overlook about this deduction is that your income level plays a role in exactly how much you are entitled to deduct.

To take this deduction, you must itemize when you file taxes rather than taking the standard deduction. In addition, miscellaneous fees and other charges that appear on your tax bill are not deductible.

Home equity line of credit interest deduction

A home equity line of credit (HELOC) offers a way to borrow against the equity in your home. It is a form of revolving debt similar to that of a credit card, and it has a fluctuating interest rate.

You can deduct the interest on a HELOC if you use the money to "buy, build, or substantially improve the residence," according to the IRS. However, you must itemize to receive this deduction.

Home equity loan interest deduction

A home equity loan is similar to a HELOC, but with a twist. Instead of a revolving line of credit, a home equity loan provides you with a lump sum and an interest rate that does not change.

Once again, you can deduct the interest, but only if you itemize.

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Medical home improvements deduction

If you make improvements to your home, you generally cannot deduct the cost of doing so. But one exception is if you make improvements to your home out of medical necessity. Examples might include building an entrance ramp or widening doorways.

These expenses follow the same rule as other medical expenses, which means that they are not deductible until they exceed 7.5% of your adjusted gross income. This is another tax break that you cannot receive unless you itemize.

Capital gains exclusion when you sell

When you sell your home, you may qualify for a major tax break. You can exclude from your income up to $250,000 of gains when you sell your home if you are a single individual. For married couples who file jointly, the exclusion is $500,000.

This essentially means you will pay no taxes on this portion of your gains. To learn more and find out who qualifies, consider consulting with a tax professional.

Bottom line

The 2017 Tax Cuts and Jobs Act (TCJA) virtually doubled the standard deduction, making it less appealing to itemize on tax returns. And if you don't itemize, you can't deduct mortgage interest.

However, some tax breaks are still available to homeowners even if they don't itemize. Talking to your tax professional and learning about the breaks for which you qualify can be a smart homeowner decision.

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