Is homeowners insurance tax-deductible?

If you own a home, your mortgage lender will require you to have homeowners insurance. And while you can deduct some of the expenses of owning a home from your income taxes, homeowners insurance typically isn’t one of them. There are, however, exceptions to this rule. Learn more about when homeowners insurance is tax deductible and what other expenses homeowners may be able to deduct from their taxable income.

Key takeaways:

• Homeowners insurance premiums are tax-deductible only in specific situations where you’re using all or part of your home for business purposes.
• Homeowners insurance reimburses you to repair your home from covered events and damage while mortgage insurance protects your lender from losses if you default.
• Other deductions for homeowners include mortgage points, mortgage interest, and home office deductions.

When homeowners insurance may be tax-deductible

While most homeowners can't deduct homeowners insurance premiums, there are several circumstances where you may qualify for a deduction of some kind.

Here are some common ones.

Home office use

If you qualify for the home office deduction, a percentage of many home expenses, including insurance, may become deductible. The deductible amount usually corresponds to the percentage of your home’s square footage that you use for your business.

To qualify, a portion of your home typically must be used regularly and exclusively for business. Answering work emails from the kitchen table usually isn't enough.

Rental property use

If you rent out part or all of a property you own, homeowners insurance on your investment property generally becomes a business expense rather than a personal one. If you rent only part of your home, you may be eligible for a homeowners insurance deduction, but only a portion of it.

Unreimbursed disaster loss

If your home’s in a federally declared disaster are and your loss is not covered by your homeowners insurance, that loss may be tax-deductible even though your premiums are not.

Theft or loss claims

If your insurance company doesn't fully reimburse you for a theft or loss, you may qualify for a deduction if it is due to a federally declared disaster. Whether a theft or loss claim creates a tax deduction depends on IRS rules and specific circumstances.

Homeowners insurance vs. mortgage insurance

Homeowners insurance and mortgage insurance are completely different.

Homeowners insurance covers your home’s structure from damage caused by fire, windstorms, hail, theft, vandalism, and other specified events. It also insures your personal property, and gives you liability protection if someone is injured on your property.

Mortgage insurance reimburses the lender for its losses if you default on your loan. The most common type is private mortgage insurance (PMI), which you must pay as long as you have less than 20% home equity on a conventional loan. PMI is tax-deductible as of 2026.

Mortgage insurance rules vary for government-backed loans.

How to calculate a homeowners insurance tax deduction

When your homeowners insurance is deductible, it's often only partially deductible. The calculation depends on how much of your property is used for your business, as well as what method you use on your return.

Rental deduction

Whether you can deduct a portion of homeowners insurance, and how much you can deduct, gets a bit complicated and nuanced. Suppose you rent out 30% of your home. About 30% of eligible expenses, including homeowners insurance, may be deductible as rental expenses.

Here’s an example:

• Annual homeowners insurance premium: $2,000
• Rental portion of home: 30%
• Potential deductible insurance expense: $2,000 x .30 = $600

Home office deduction

If you run a business out of your home, you can use the method above to deduct a portion of your mortgage and expenses, proportional to the percentage of your home that’s dedicated to your office. Alternately, you can deduct up to $5 per square foot of qualifying office space, subject to limits set by the IRS.

For example, if you have 300 square feet of office space in your home, you may be able to deduct up to $1,500 using this simplified method.

Other tax deductions for homeowners

While homeowners insurance is typically only deductible under specific situations or circumstances, other tax deductions for homeowners are available. Make sure you explore whether any of the following apply to you.

Mortgage points deduction

Mortgage points are paid at closing and reduce your interest rate. You can typically claim the full amount on your taxes the same year you buy mortgage points.

Mortgage interest deduction

The mortgage interest deduction allows homeowners to deduct the interest paid on the first $750,000 of qualified personal residence debt on a primary or second home. You can find the amount of mortgage interest paid per year on Form 1098 from your mortgage lender.

Property tax deduction

You can deduct the property tax payments you make each year if you itemize your tax return. Let’s say you’re married and filing jointly. You can deduct up to $10,000 in property taxes per year when filing your taxes. On the other hand, if you’re single or filing separately, you can deduct up to $5,000 in property taxes. You’ll claim the property tax deduction using Schedule A of the 1040 tax form.

Rental deductions

You’re eligible for a rental deduction if you rent out a part of your home, such as a garage apartment, basement, or spare bedroom? You’ll need to pay taxes on any rental income, but you can recoup some money by deducting maintenance and repair costs, insurance, utilities and other rental expenses.

Home office deductions

The IRS allows homeowners with a qualifying home office to calculate the amount they’re able to deduct from their taxes in one of two ways. The first method involves calculating the actual expenses you spend operating your business from home. This could include maintenance, utilities, internet and other expenses. You’ll need to provide receipts.

The second method is a simplified estimate that allows you to deduct $5 per square footage of office space. So, if your work area is 200 square feet, you’d qualify for a $1,000 deduction.

Home improvement deductions

Home improvements that improve your home’s value are called capital improvements. Types of qualified improvements include swimming pools, home additions, garages, a new roof, a new central air conditioning system, water heater upgrades, home security systems and more.

As a homeowner, you can’t deduct these expenses. But the value of any capital improvements you make to the home is added to your cost basis in the home which in turn affects whether, and how much, you’ll pay in capital gains taxes when you sell the property.

It’s important to keep records of all major home improvements for this reason. A qualified accountant or tax specialist can help you work through all improvements to determine which ones are eligible for this tax treatment.

Energy-efficiency deductions

Transforming your home into an energy-efficient property can help you save money on your utility bills and taxes.

The Residential Renewable Energy tax credit allows you to claim credits when you implement solar, wind, geothermal or fuel-cell systems before the end of 2025. Energy-efficient upgrades that qualify for this tax credit include solar-powered water heaters, solar panels, wind turbines and geothermal heat pumps.

Deductions for accessibility improvements

If you improve your home’s accessibility for members of your household with disabilities, you may qualify for additional tax deductions. You can deduct the expenses you incurred to make your home accessible, minus any home appreciation.

Capital gains tax exclusion

You might wonder if you’ll be responsible for paying capital gains tax when you sell your home. The good news is that when you decide to sell, you most likely won’t have to pay capital gains tax.

Thanks to the Taxpayer Relief Act of 1997, you may be exempt from paying capital gains as long as you meet the qualification criteria. You’ll need to have lived in and owned the home for 2 of the past 5 years and not have used this tax break within the last 2 years. You’re exempt from paying capital gains tax on home profits up to $500,000 if you file taxes jointly. You’re also exempt from paying this tax on home profits up to $250,000 if you’re an individual filer.

Theft loss deductions for homeowners

If you are a victim of personal property theft, you may be entitled to a deduction. Under current IRS rules, theft losses are generally only deductible if the loss is connected to a federally declared disaster. In other words, a typical home burglary usually won’t qualify for a federal tax deduction.

But if it’s tied to a federally declared disaster, or if the stolen property was part of a rental property, investment property, or business-use property, it may qualify. These losses are generally reported using IRS Form 4684, Casualties and Thefts, and there are limits.

Standard deductions for the 2026 tax year

For the 2026 tax year, the standard deductions are:

FAQ

Here are answers to popular home insurance tax deduction questions.

What is the most overlooked tax break?

Possibly one of the most overlooked deductions is the one for self-employed people who work from home. You’ll have to meet the IRS’s strict standards, but it can help reduce your tax burden significantly.

What home expenses are tax deductible?

This is highly dependent on your individual situation. But potentially deductible home expenses include mortgage interest, qualifying property taxes, eligible home office expenses, rental property expenses, certain energy-efficient improvements and some accessibility improvements. For most homeowners, insurance premiums on a primary residence aren't deductible however.

How does the new $6,000 tax deduction work?

The One Big Beautiful Bill instituted a Senior Deduction for those aged 65 and older. It runs from 2025 to 2028 and allows seniors to deduct up to $6,000. It’s reduced per your income and becomes $0 when your AGI hits $75,000, or $150,000 for married couples filing a joint return.

What expenses are 100% tax deductible?

For qualifying rental or investment properties, many ordinary and necessary operating expenses – and that includes insurance premiums – may be fully deductible. But as always, there are detailed IRS rules, so a tax professional should be consulted.

Is homeowners insurance tax-deductible on a second home?

Whether homeowners insurance is tax deductible on a second home depends on how the property is used. If your second home is a personal vacation home, premiums generally aren't deductible. If it's a rental property, all or part of the insurance may qualify as a business expense.

Is homeowners insurance tax-deductible in California?

When a tax deduction is allowed for your homeowners insurance, it’s claimed on your federal tax return, not your California return.

The bottom line: Most homeowners can't deduct insurance premiums

Homeowners insurance premiums are usually not tax deductible. However, there are exceptions, such as for rental or investment properties, or the business use of your home. The good news is that the increase in the standard deductions makes itemized deductions a thing of the past for most homeowners.

If you’re ready to buy or refinance a home, explore your borrowing options today with Rocket Mortgage.