Is homeowners insurance tax deductible?

Home insurance premiums are generally not tax deductible for most homeowners. The only exceptions are if:

• The home is a rental property, in which case you can deduct the cost of insurance as a business expense.

• You run a business out of your home, in which case you may be able to deduct a portion of your insurance costs.

Let’s take a closer look at when and how home insurance is tax deductible.

When is homeowners insurance tax deductible?

Home insurance premiums usually aren’t tax deductible because most people buy homes for their personal use. But if your home is used for business purposes, then you may be able to deduct all or some of your home insurance expenses. 

If you own a rental property

If you use your home as a rental property, you can usually deduct the cost of homeowners insurance on your tax return. This is because a rental property is considered a business. Deducting the insurance as a rental expense will lower the taxable income generated by the rental.

Keep in mind that rental properties require different insurance coverage than your primary residence — specifically, landlord insurance, not a traditional homeowners policy. Sometimes called a rental dwelling policy, landlord insurance protects against the added risks that you face when you rent a property to others, including lost income if a covered event damages the home and tenants can’t live there until it’s repaired.

If you operate a business from your home

Additionally, you may be able to deduct a portion of your homeowners insurance costs if you run a business out of your home. The area you use as an office has to meet the criteria laid out by the Internal Revenue Service to qualify, though. 

It must be:

• Covered by your home insurance

• Regularly and exclusively used for business purposes

• The business’s principal location

Importantly, most home insurance policies exclude or limit coverage for business-related contents (i.e., items you use for your business activities that aren’t permanently attached to your home). So, it’s extremely important to review your policy or speak with an agent to verify your coverage details. That way, you’ll know what’s covered, what might have limited coverage, and whether you could benefit from purchasing broader coverage.

What are some common homeowners deductions?

Home insurance may not be tax deductible, but there are still several deductions that homeowners can look into. For example, you may want to talk to your tax preparer about the deductions available for:

• Mortgage interest: You can deduct interest paid on the first $750,000 of mortgage debt (or $375,000 if married filing separately) if you bought a house after December 15, 2017. For homes purchased between October 14, 1987, and December 15, 2017, the mortgage debt limit is $1 million (or $500,000 if married filing separately).

• Home equity loan interest: Interest on a home equity loan is typically deductible as long as you used the money to buy, build, or substantially improve the home. The amount of this loan counts toward the mortgage debt limit listed above.

• Medical improvement expenses: Making upgrades for medical purposes, such as installing ramps or walk-in showers, may be deductible if you can show that someone in your household requires the accommodations. However, your income may limit the amount you are reimbursed. 

• Discount points: If you’ve purchased mortgage points, also called discount points, to reduce your mortgage interest, you may be able to deduct some or all of the cost. Deductions must meet specific criteria. Note that discount points are not closing costs or loan origination points — those are not tax deductible. 

• Property taxes: Those who are single or married and filing jointly can deduct up to $10,000 of property taxes (or $5,000 if married filing separately).

• Capital gains: If you sell your home for a profit, you may owe capital gains taxes. However, married couples can claim up to $500,000 in capital gains exclusions, and individuals can claim up to $250,000 if they lived in the house for at least two of the last five years.

While the homeowners insurance for your primary residence is not deductible, there are a lot of deductions that you can take advantage of to reduce the cost of home ownership. Speaking with a financial professional is the best way to determine what applies to your situation.

What are other non-deductible home expenses?

As you can see with homeowners insurance, not every expense associated with your home is deductible. Here are some common expenses most homeowners pay that aren’t deductible when it comes time to file your tax return:

• Wages for housekeepers, gardeners, or other domestic workers

• Homeowner associations fees for a primary residence

• Utility costs

• Depreciation

• Forfeited down payments or deposits

Plan your budget to pay these necessary expenses, but don’t try to include them on your tax return’s itemized deduction list.

Standard deductions for the 2025 tax year

For many homeowners, keeping track of every single receipt and complex tax rule (known as itemizing deductions) isn't worth the headache. Instead, they choose the standard deduction. This is a simple, fixed amount that automatically reduces the income you pay taxes on.

Here are the standard deductions for the 2025 tax year:

• Single: $15,750

• Married filing jointly: $31,500

• Married filing separately: $15,750

• Head of household: $23,625