Owning a home isn’t just about building equity and creating a space that’s truly yours—it also comes with a few financial perks at tax time.

If you’re considering taking the leap into homeownership, here are a few advantages to keep in mind.

Mortgage-related deductions

One of the biggest tax benefits is the mortgage interest deduction. If you have a mortgage on your primary residence or second home, you may be able to deduct the interest you paid on loan amounts up to $750,000, or half that if married and filing separately. This can reduce your taxable income for potentially substantial tax savings, especially in the early years of a loan when interest payments are highest.

If you paid for discount points to secure a lower mortgage rate when purchasing your home, you might also be able to deduct the amount spent on them in the year of purchase. However, you currently aren’t able to deduct your premiums if you pay private mortgage insurance (PMI).

Property tax deduction

Similarly, you can deduct a portion of your property taxes. The current tax code allows for a deduction of up to $10,000 (again, half that if married filing separately) in state and local taxes (SALT), which include property taxes. While this cap may temper the benefit for those in high-tax states, it still provides meaningful savings for many.

Home office deduction

For small business owners and self-employed individuals, a home office deduction may be allowed. The key is that a portion of your home or a separate structure on your property must be used exclusively and regularly for business purposes, in which case you may be able to deduct a percentage of your mortgage interest, insurance, utilities, and maintenance costs.

Energy-efficient home upgrades

Federal tax credits are available for certain improvements, such as solar panels, energy-efficient windows, and insulation. These credits directly reduce the amount of tax owed, making them a great incentive for homeowners looking to lower their energy costs while also saving on taxes.

Capital gains exclusion

If you sell your home for a profit, you may be eligible for a capital gains exclusion. As long as you meet the criteria—primarily, you must have owned and used it as your primary residence for at least two of the last five years—you can exclude up to $250,000 in capital gains from your taxable income ($500,000 for married couples filing jointly). This means that if your home has appreciated in value, you may not have to pay taxes on a significant portion of your profit.

Thinking of becoming a homeowner? These tax advantages could make it even more rewarding. If you have questions about the homebuying process, reach out to a local real estate professional to learn more. They can also help connect you with a tax professional to ensure that you understand the deductions and credits that may be available to you, enabling you to take full advantage of them.