Owning a home not only offers a sense of security but can also lead to significant tax savings. Discover the top tax deductions and credits available to homeowners so you can enjoy the perks of homeownership – even at tax time.
Homeowner Tax Questions
Let’s answer some of the most common tax deduction questions new homeowners ask.
Is There a VA Loan First-Time Homebuyer Tax Credit?
The first-time homebuyer tax credit is a key feature of the First-Time Homebuyer Act of 2024 would allow a $15,000 refundable tax credit for first-time homebuyers. If passed, this tax credit would be available for all first-time homeowners.
Is the VA Funding Fee Tax Deductible?
The VA funding fee was previously tax-deductible as part of the mortgage insurance premium deduction. However, that deduction expired at the end of 2021 and has not been renewed. While the VA funding fee isn't tax-deductible, it’s important to remember that it helps keep the VA loan program running — allowing future Veterans and service members to buy homes with little to no down payment.
Is Home Sale Income Taxed?
Homebuyers selling their current home should be aware of capital gains tax, which is a tax on the profit of an asset. Capital gains tax applies to all mortgage types – including VA loans.
When selling a primary residence, the profit you earn is exempt from capital gains tax up to the first $250,000 for a single-filing taxpayer or the first $500,000 in profit for joint filers.
Profits over those thresholds are usually taxed at the normal rate.
Is There a Tax Credit for Energy Efficient Mortgages?
The IRS offers “Residential Energy Tax Credits,” which would apply to homeowners taking out an energy-efficient mortgage (EEM). The IRS offers up to $3,200 for homeowners who make qualified energy-efficient home improvements.
How We Maintain Content Accuracy
Our mortgage experts continuously track industry trends, regulatory changes, and market conditions to keep our information accurate and relevant. We update our articles whenever new insights or updates become available to help you make informed homebuying and selling decisions.
Current Version
Jan 2, 2026
Written BySamantha Reeves
Figures updated for 2025 tax year.
Jan 22, 2025
Written BySamantha Reeves
Accuracy checked content and updated for tax season.
Veterans United often cites authoritative third-party sources to provide context, verify claims, and ensure accuracy in our content. Our commitment to delivering clear, factual, and unbiased information guides every piece we publish. Learn more about our editorial standards and how we work to serve Veterans and military families with trust and transparency.
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