Tax Benefits of Homeownership

Profits from Home Sales

  • You can exclude $250,000 ($500,000 for joint filers) of capital gains on the sale of your home if you used it as your primary residence in two, of the last five years. 

  • You cannot have used this exclusion in the two years before the sale of the home.

Property Tax and Mortgage interest deduction

  • If you itemize deductions, you may reduce your income taxes by deducting mortgage interest and property taxes you pay on your homes.  

  • For homes bought before Dec. 15, 2017, you may deduct the interest you pay on mortgage debt up to $1 million. For homes bought after Dec. 15, 2017, you may deduct the interest you pay on mortgage debt up to $750,000. 

  • Your property taxes may also be deductible.  There is an overall cap of $10,000 for state income taxes and property taxes deductions.

HECM (Reverse Mortgage)

  • Money received from reverse mortgages are not taxable and as an added benefit, generally do not impact your Social Security or Medicare benefits.  

Investment Property

  • The main advantage real estate investment has over stocks and bonds is depreciation. Depreciation expenses can help drive down taxable income.


Greg Shverdin of Climb Accounting, (415) 562-6454, greg@climbcpa.com