If You Are A New Home Buyer – These IRS Tax Tips Can Save You Hundreds in 2025
by Amiya Nandy in Business, News on July 20, 2025When someone plans to buy a house, they have to be prepared for that step. A portion of the population of the USA may find it as the largest — and the most emotional — decision of their life if they were buying a house. To many, buying a new house is a happy occasion. Even the IRS, here to inform the public free of charge, provides the recent home buyers with a relief — at least, in their tax bill.
Most homeowners don’t get the full story or never even know about the tax credits available if they are homeowners. As a matter of fact, there is more than the mortgage interest deduction that homeowners can claim, and most don’t even know these benefits exist. The IRS let it go that buyers can use these benefits — title is not the sole one.
Tax Breaks Never Written About Publicly
IRS notes one thing first — home owners are likely to deliberate itemized deductions over the standard ones. The idea behind this choice: the most significant home-related expenses would only be deductible if their method is chosen.
Consider these as the requirements of the individual:
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1. Property Taxes
The one who has paid state or local real estate taxes for the assessed year of 2025 is most likely the one to escape the taxation of such expense — if they still have savings below the cap. The cap of up to $10,000 covers all deductions from the sources of income — they may be state and local income, state, local, and property taxes.
2. Mortgage Interest
According to many of the homeowners, this is kind of their tax deduction. Interest on the mortgage for a primary residence (or, in some cases, a secondary one) is the common-case tax deduction — as long as a loan qualifies as of the IRS set conditions. The amount, which determines your tax deduction, might eventually be quite large, depending on your loan amount and the date it was issued.
3. Mortgage Insurance Premiums
The Insurance Policy is sometimes not renewed so you may have it just one year out of several. The U.S. Congress may either renew the credit for the tax year 2025 or it would not be of any consequence to many taxpayers unless they remember to ask for it.
Expenses You Cannot Deduct (Even If You Think You Should)
Now for the caveat: not every housing cost is subject to tax deductions. Here’s a brief overview of the things that the IRS does not allow:
- Homeowners’ insurance (including title insurance)
- Utility bills (gas, electricity, water, etc.)
- HOA or condo association fees
- Home repairs or general maintenance
- Domestic staff wages
- Internet and Wi-Fi services
- Mortgage principal payments
- Closing costs (apart from those defined as deductible)
Therefore, buying a new cooker or mending the roof does not only improve the quality of living in your house but it also won’t be tax-deductible.
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A Special Tax Credit for Low-Income Buyers
One of the least recognized choices here is the Mortgage Interest Credit, which is not like the regular interest deduction. If you were given a Mortgage Credit Certificate (MCC) by your state or local housing agency when you bought your house, you may be eligible for a dollar-for-dollar credit from your federal income taxes, i.e. it’s a tax credit, not a tax reduction.
This is a major financial help for those people with modest incomes who don’t have any room for the monthly payment of debts as well as the interest of housing in the long term.
Ministers and Military: Don’t Miss These Savings
Other than what is mentioned above, the IRS also grants housing allowance relief to certain occupancies only such as the members of the clergy and the military. For these people, IRS lists some exceptions and credits they might qualify for, particularly if they are getting a specific housing allowance as part of their occupation.
If last year or this year you purchased a domicile, you might have a nice surprise when you claim your taxes for the next time.
A lot of people in the United States just don’t have any idea of the available tax benefits and they are, therefore, throwing money away
Here are a few of the items that tax experts recommend to take a grab of before filing:
- Details of your tax-deductible mortgage interest, printed on the 1098 document from your loaner
- Evidence of the property taxes you have turned in the payment for the house
- Printouts of PMI payments (if it applies to you)
- Any materials from your state housing agency referring to MCCs
If you get a tax preparer or tax software, your forms are necessary for you to get the refunds or the credits you actually deserved.
Conclusion
The IRS is not always a sweet peach, but still, there is a possibility that TFIs and SFCs can be of great use for the homeowners in 2025 so taking a chance is worth it.
During the time that there is a stable high home price and fluctuating interest rates, it is the least that anyone can do to get the assist of taxes as it is a route of how one can benefit greatly from it in the end. Additionally, the reduction of a tax bill is all it takes to go through these tough economic times!
Consequently, you might as well check over your bills and identify the places where you could cut some expenses instead of blindly paying the full amount of the bill.
