Nobody likes paying too much in taxes. The good news? If you’re a homeowner, you might have more control than you think. You can lower your tax bill with a few smart deductions—and keep more money where it belongs: in your pocket.

Let’s be honest—homeownership can come with a lot of costs. But many of those expenses can actually work in your favor when it’s tax time. Whether you're living in Southern New Hampshire or exploring South Nashua houses for sale, knowing the right deductions can make a big difference.

In this laid-back, helpful guide, we’ll walk through some of the most common (and powerful) homeowner tax breaks. And yes—many are easy to claim!

Why It Pays to Know Your Deductions

Owning a home comes with benefits—some are emotional, like feeling proud and secure. But others are financial, like tax savings.

When you lower your tax bill, you’re not just saving money. You’re making smart choices for your future. Every dollar saved on taxes is a dollar that can go toward home upgrades, emergency savings, or even a dream vacation.

The IRS offers several deductions and credits that apply directly to homeowners. You just have to know what to look for—and how to use them the right way.

Mortgage Interest: A Big Tax Break

One of the biggest deductions for homeowners is the mortgage interest deduction. It allows you to deduct the interest you pay on your home loan.

Here’s how it works:

• You can deduct interest on up to $750,000 of mortgage debt

• This applies to primary homes and sometimes second homes

• You must itemize your deductions

For many, mortgage interest is the largest part of their monthly payment. So this deduction can really lower your tax bill—especially in your early years of homeownership when interest is highest.

Property Taxes Can Be Deducted Too

Another way to reduce your taxes? Deducting your property taxes.

As a homeowner, you likely pay local property taxes each year. The IRS lets you deduct up to $10,000 in combined state and local taxes. This includes:

• Property taxes

• State income taxes (or sales taxes)

• Personal property taxes, like vehicle registration (in some cases)

If you live in Southern NH, your property tax bill might feel high. But remember—you can use part of that amount to lower your tax bill come April.

Home Office Deduction (If You Qualify)

Do you work from home? You might be able to deduct part of your house as a home office.

Here’s the catch—it must be:

• A dedicated space (not the kitchen table!)

• Used regularly and only for work

There are two ways to calculate this deduction:

1. Simplified method: $5 per square foot (up to 300 sq. ft.)

2. Regular method: Based on your actual expenses like utilities, mortgage interest, etc.

This deduction can really help if you’re self-employed or run a business from your home. Many buyers checking out South Nashua houses for sale look for homes with office space for this very reason!

Energy-Saving Improvements

Did you make your home more energy-efficient this year? Great news—there’s a federal tax credit for that!

You can get credits for:

• Installing solar panels

• Adding insulation

• Upgrading windows or doors

• Installing high-efficiency heating or cooling systems

These improvements help the planet—and your pocket. Some credits are worth up to 30% of your cost. That’s a huge way to lower your tax bill while also boosting your home’s value.

Mortgage Insurance Premiums

If you put down less than 20% on your mortgage, you may be paying private mortgage insurance (PMI). Here’s the upside—those premiums might be tax-deductible.

This deduction applies to:

• Loans from 2007 onward

• Most conventional, FHA, and VA loans

• Households under certain income limits

Check with your lender or tax advisor to see if this applies to you. It’s often overlooked, but it can absolutely help you lower your tax bill.

Points Paid at Closing

When you buy a home, you might pay “points” to get a better mortgage rate. These upfront costs can sometimes be deducted in full the year you buy.

Here’s what to know:

• One point = 1% of your loan amount

• They must be for your primary residence

• You must have paid them directly

If you recently closed on one of the Southern NH houses for sale, don’t forget to include this deduction. It can offer big savings in your first year as a homeowner.

Capital Gains Exclusion

Thinking about selling your home? The IRS gives homeowners a generous capital gains exclusion if you’ve lived there for at least two of the past five years.

That means:

• You can exclude up to $250,000 in profit (single)

• Or up to $500,000 (married couples)

This isn't a deduction, but it can still lower your tax bill in a major way. If you bought your home at the right time, this break can protect a lot of your profit when you sell.

Rental Property Deductions

If you own a rental home—or are thinking of buying one—you’re in luck. Rental properties come with lots of tax benefits.

Some things you can deduct include:

• Mortgage interest

• Property management fees

• Repairs and maintenance

• Travel to and from the property

• Depreciation

Many smart investors look at South Nashua houses for sale for rental opportunities. Why? Because the area has high demand—and solid tax benefits to go with it.

Home Improvement Loans

Did you take out a home equity loan or HELOC for upgrades? If the money went into improving your home, the interest might be deductible.

That includes projects like:

• A new roof

• Kitchen remodel

• Finished basement

• Deck or patio addition

Just make sure you keep receipts and proof that the funds were used for your home. If they were, that interest can help you lower your tax bill.

Charitable Donations (Of Property or Land)

If you donate part of your land—or even an old home or barn—you might be able to deduct its value. These charitable donations often apply to:

• Land conservation

• Local non-profits

• Historic preservation groups

These gifts must meet IRS rules, but when done correctly, they can lead to big tax breaks. Some Southern NH homeowners use this as a way to give back and lower taxes.

Local Tax Credit Programs

Don’t forget—some towns in Southern NH offer local tax credits for:

• Veterans

• Seniors

• Disability status

• Energy improvements

It’s worth calling your local assessor’s office to check. These local programs are often easy to miss, but they can absolutely help you lower your tax bill.

Timing Matters

Here’s something many people don’t think about: when you do things can impact your deductions.

Try to:

• Pay your January mortgage payment in December

• Prepay next year’s property taxes (if allowed)

• Make donations before year-end

These moves help you get the deduction now, instead of waiting a full year. That means bigger savings this tax season.

Track Every Penny

If you want to make the most of your tax deductions, organization is key. Keep good records of:

• Mortgage statements

• Closing documents

• Property tax bills

• Receipts for upgrades

• Energy-efficient product paperwork

A simple folder or spreadsheet can save you hours come tax time. Plus, it helps your accountant (or tax software) catch every single deduction that can lower your tax bill.

Consider Working With a Tax Pro

Some deductions are simple. Others can get tricky. That’s why it’s often worth working with a tax professional, especially if:

• You just bought or sold a home

• You own rental property

• You made major improvements

A pro knows all the latest IRS changes and can help you take advantage of every homeowner tax break available. A little help can lead to big savings.

Lower Your Tax Bill With These Smart Deductions

Let’s face it—owning a home isn’t cheap. But the tax system gives you plenty of ways to take back some of that cost.

From mortgage interest to energy credits, you can lower your tax bill and build wealth at the same time. Whether you're a longtime resident or just browsing South Nashua houses for sale, it's smart to know your options.

Being a homeowner in Southern NH means you not only enjoy a great lifestyle, but you also open the door to powerful tax advantages.

So, gather your receipts, check those deductions, and get ready to save. You've earned it.

Need Help With Buying or Selling in Southern NH?
Whether you’re upgrading, downsizing, or just exploring your options, reach out anytime. I’d love to help you make smart moves—with your home and your finances.

Let’s make real estate (and taxes!) a little easier, together.

If you need more info on how to lower your tax bill, or are ready to sell your house give us a call at (603) 883-8840. You can also sign up for your dream home search or reach out to Our Agents for more information. We’d love to help you with your real estate needs.