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5 tax breaks for homeowners that don’t require a mortgage (Image Source via Getty Images)

For many homeowners, tax breaks begin and end with mortgage interest. But with higher standard deductions, that write-off delivers less than it used to — and for some, nothing at all.

But what is available this year are several homeowner tax breaks that don’t require a mortgage. Some are lesser-known strategies that have been around for years. Others are brand-new opportunities, thanks to recent changes to the law. At least one expires at the end of this year.

Here are five deductions and credits worth a second look before you file your 2025 tax return.

1. Energy-efficient upgrades you need to claim now

If you’ve made energy-efficient improvements to your home, you may qualify for valuable federal tax credits — not deductions, but credits that reduce your tax bill dollar for dollar.

The Energy Efficient Home Improvement Credit covers insulation, energy-efficient windows and doors, heat pumps and high-efficiency HVAC systems. You can claim up to 30% of the cost, with caps that depend on the upgrade. But you’d need to act fast: Equipment must be installed by December 31 to qualify for this federal credit on your 2025 tax return.

Separate federal credits exist for solar panels, solar water heaters, geothermal systems and battery storage systems — often with higher limits and no annual dollar limits. If you can’t use the full credit right away, you might be able to carry it to future tax returns.

State and local incentives might still be available. Even after federal credits expire, California, New York and more than 10 other states offer rebates of up to $14,000 for energy-efficient appliances and upgrades. Check with your state’s energy office or utility company to see what’s available in your area.

2. Rental income and the 14-day rule

If you rent out part of your home — or the entire property for part of the year — you can deduct home-related expenses including mortgage interest, property taxes, insurance, utilities, repairs and even depreciation. With nearly 2 million active short-term rental listings in the U.S., many homeowners are discovering these tax breaks.

Deductions are based on the percentage of your home used for rental income and the duration.

The IRS imposes a 14-day rule: Rent your home for 14 days or fewer annually, and the income typically isn’t taxable — no reporting required. (But you also can’t deduct any rental expenses for those days.) Rent for 15 days or more, and you must report your rental income. Whether you can deduct losses depends on how much you use the property personally.

Short-term rentals also qualify, though tax rules get complicated. Platforms like Airbnb and VRBO make it easy to rent out your home, but if you also use the property personally for more than the greater of 14 days or 10% of rental days, the property is treated as a residence — meaning you must divide expenses proportionally between rental and personal days.

No matter what, careful recordkeeping is critical. Track every rental day, personal-use day and expense. It’s worth paying for a CPA or financial advisor to stay on the best side of mixed-use rules and tax obligations.

3. Higher property tax deductions through 2029

Yes, property taxes are deductible, but with recent changes worth flagging.

Starting in 2025, the state and local tax (SALT) deduction temporarily jumps to $40,000 for single filers and married couples filing jointly. It’s a significant increase from the previous $10,000 cap. The benefit phases out for modified adjusted gross incomes above $500,000, gradually reverting to the old $10,000 cap at $600,000. And after 2029, the cap drops back to $10,000 for everyone.

If you itemize, property taxes combined with charitable giving, mortgage interest and medical expenses can add up quickly.

You can also time property tax payments strategically. Paying an assessed 2026 bill before December 31 lets you claim the deduction on your 2025 tax return instead of waiting another year — a “bunching” strategy.

Given the temporary boost and complex phaseout rules, a tax professional can help you maximize these deductions before the cap drops back to $10,000 in 2030.

4. Home equity loan interest — with a caveat

You can deduct interest paid on a home equity loan or HELOC. However, you must have used the money to “buy, build or substantially improve” the home securing the loan.

Qualifying uses include renovating a kitchen, adding a bathroom, replacing a roof or installing energy-efficient systems. It also means you can’t use the money to pay off credit cards, cover college tuition or fund a vacation generally.

These rules were temporary under the Tax Cuts and Jobs Act but made permanent by the One Big Beautiful Bill signed into law in July 2025. This deduction is only available if you itemize, and it’s subject to IRS limits of $750,000, so talk with a tax professional if you’re not sure.

Here too, documentation is critical. Keep receipts, invoices and bank statements showing exactly how you used the borrowed funds. Without proper records, the IRS can disallow your deduction in an audit.

5. Medically necessary home improvements

You may be able to deduct medical expenses for certain home improvements made for medical reasons — but only under specific conditions.

For example, installing wheelchair ramps, widening doorways, adding stair lifts or modifying bathrooms to accommodate a disability all qualify. For accessibility features like ramps and grab bars, the IRS assumes they don’t increase your home’s value, and so you may be able to deduct the full cost. For improvements that do add value — like installing an elevator or adding a ground-floor bathroom — you deduct only the cost minus any increase in home value.

You must itemize to claim this deduction, and these expenses only count to the extent that total medical expenses are more than 7.5% of your adjusted gross income. That threshold means this deduction primarily benefits households facing high medical costs in a given year.

While this deduction won’t apply to everyone, it can provide meaningful relief for families managing chronic illness, disability or age-related mobility issues.

Bottom line: Don’t leave savings unclaimed

Owning a home can be expensive, but 2025 opens the door to tax benefits beyond your mortgage statement.

As with any tax strategy, whether these deductions help depends on your situation, how you file, and the documentation you keep. Review your home-related spending now rather than at filing time, and talk with a CPA or tax professional to make sure you’re claiming everything you qualify for.

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About the writer

Michael Kurko is a finance writer and editor who covers investing, real estate, personal budgeting and financial literacy. His expertise has been featured in FinanceBuzz, The Balance, Investopedia, U.S. News & World Report and Forbes Advisor, among other top financial publications. In addition to his work in finance, Michael is also a freelance book editor and fiction writer. He strives to make complex money topics clear and approachable so readers can make informed decisions and build lasting financial confidence.

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5 tax breaks for homeowners that don’t require a mortgage