Are Home Insurance Premiums Tax Deductible in 2024?

Homeowners insurance isn’t tax deductible for most homeowners, but you can take advantage of several other tax breaks for homeowners.

Kim Porter
Written byKim Porter
Kim Porter
Kim Porter
  • Co-authored the book “Future Millionaires’ Guidebook”

  • 13 years writing personal finance content

A former chief copy editor at Bankrate and past managing editor at Macmillan, Kim specializes in writing easy-to-understand, actionable personal finance content.

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Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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Updated May 29, 2024

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Homeowners insurance is an important — and expensive — cost of owning a home. In 2024, the national average cost of home insurance sits at $2,377, according to Insurify data. And analysts predict premiums will increase another 6% by the end of the year.

But while you can claim tax deductions for home-related expenses like property taxes and private mortgage insurance, you typically can’t deduct home insurance premiums on your federal income tax return. 

Comparing quotes from multiple insurers and taking advantage of tax breaks you qualify for can help you offset the cost of protecting your home.

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Is your homeowners insurance tax deductible?

Homeowners insurance premiums generally aren’t tax deductible if the home is your primary residence. This is true whether you claim the standard deduction or itemize deductions on your tax return. Likewise, you typically can’t deduct payments for fire, theft, comprehensive coverage, mortgage, or title insurance.[1]

“However, if a portion of your home is used for business purposes, you may be able to deduct a portion of the insurance premiums as a business expense,” says Elise Faucette, a certified public accountant.

When home insurance may be tax deductible

Homeowners insurance is tax deductible in a few instances. If you rent out your home or run a business out of your home, you can typically deduct some or all of your insurance premiums. In some cases, you may qualify for a deduction if your property is damaged and your insurer denies your homeowners insurance claim.

You run a small business out of your home

If you’re self-employed and regularly use part of your home as an office, then you may be able to claim the home office deduction. You can either take a simplified deduction or write off actual expenses, which include homeowners insurance and other home-related expenses.

The portion of your homeowners insurance premium that you can deduct is based on the percentage of your home, in square footage, that’s used for business purposes.[2] So if your home measures 2,000 square feet and you regularly use 10% of that space as your home office, you can deduct 10% of the amount you paid in homeowners insurance premiums.

How to Claim the Home Office Deduction

To claim this deduction, you’ll need to file Schedule C (Form 1040): Profit or Loss from Business.

You’re a landlord and receive rental income

Whether you rent out an entire property or just a room in your primary residence, you can write off some of the business expenses that come with being a landlord. Homeowners or condo insurance is one of those deductible business expenses.

You can claim the entire amount you paid for the annual insurance premium if you rented out the entire home. But if you just rented out part of the property, you can deduct the part of your expenses that applies to the rented portion.[3] Landlords can also deduct the money spent on mortgage insurance, which is a type of insurance that protects the lender against default.

How to Claim Landlord Expenses

Claim these expenses on Schedule E (Form 1040): Supplemental Income and Loss.

You submitted a theft or loss claim that was denied

The casualty and theft loss deduction allows you to write off losses if your property is damaged and your insurer denies some or all of your insurance claim. To qualify, the losses must result from a sudden, unexpected event during a federally declared disaster. You’ll also need to itemize your deductions on Schedule A (Form 1040).[4]

You may deduct either the entire loss or a portion of it, based on what your homeowners insurance company covers. For instance, say a tree falls on your home during a hurricane, and the storm is considered a federally declared disaster. The repairs cost $6,000, but your insurance company will only cover $4,000. The $2,000 personal casualty loss is the tax-deductible portion. You may also need to adjust the deduction based on your income and other factors.

How to Claim the Casualty and Theft Loss Deduction

To claim this deduction, follow the IRS Instructions for Form 4684.

Other tax breaks for homeowners

The federal government and many states offer ample opportunities for homeowners to reduce their tax burdens. These breaks can be in the form of tax deductions or tax credits. Here are some common tax breaks available to homeowners for their federal income taxes.

Important Information

The 2017 Tax Cuts and Jobs Act, which affects some homeowner tax breaks, will expire on Dec. 31, 2025, unless Congress acts to extend some or all of the legislation’s provisions.[5]

Mortgage interest deduction

The interest portion of your monthly mortgage payments is tax deductible, whether for your primary residence or rental property. But you must meet some eligibility requirements.

First, you have to itemize your tax deductions on Schedule A instead of taking the standard deduction. The deduction is also limited by the amount of your home loan and the date you closed on the mortgage.

If you took out your home loan after Dec. 15, 2017, you can deduct the full amount you paid toward interest on the first $750,000 of your mortgage debt ($375,000 if married filing separately). For loans originated on or before that date, interest is deductible on loan amounts of up to $1 million ($500,000 if married filing separately).[5]

Real estate tax deduction

If you live in a state, county, or city that has a local tax on real estate, you can usually take a tax deduction for that property tax in the same year you paid it.

But you’ll have to itemize your deductions on your federal income tax return, and there are limits to the amount you can deduct for real estate taxes. The most you can deduct for state and local property or income taxes is $10,000.[6]

Home office deduction

If you exclusively use part of your home on a regular basis for running a business, you may be able to take a deduction for the amount of space you use for work — up to 300 square feet.

You can do this by either taking a simplified deduction of $5 per square foot or by maintaining records of actual expenses.[7] Either way, you’ll need to itemize your deductions to take this tax break.

Rental deduction

If you own a home that you rent out to tenants, you may be able to deduct certain business expenses related to operating your rental business. The Internal Revenue Service (IRS) says these expenses must be necessary and appropriate, such as mortgage interest, property taxes, operating expenses, and repairs.

Accessibility home improvements deduction

While no specific deduction exists for making home improvements, you may be able to take a medical expense deduction if you make certain medically necessary upgrades.[8]

Examples of deductible improvements include building an entrance ramp to your front door, adding grab bars or handrails, or making other modifications to accommodate an occupant with disabilities. You’ll need to itemize your deductions and meet all qualifications to be eligible for the deduction.

Energy-efficient improvements credits

You may be able to claim a tax credit if you install certain energy-efficient equipment in your home, such as central air conditioners, water heaters, furnaces, or hot water boilers. To qualify for the credit, the products must meet the Consortium for Energy Efficiency’s highest-efficiency tier, and meet other criteria outlined by the IRS.

Home insurance tax deduction FAQs

Unfortunately, home insurance isn’t tax deductible for most homeowners, but you can find other ways to lower the cost of home ownership, including comparison shopping for the best home insurance rate available to you. And here’s some additional information to help you better understand the tax benefits of home ownership.

  • What insurance is tax deductible?

    Typically, you can deduct premiums you’ve paid for health insurance and long-term care insurance. If you run a business or are self-employed, you may be able to deduct additional types of insurance as a business expense.

  • How much is the deductible for home insurance?

    When you buy a home insurance policy, you’ll be able to choose your deductible — which is the amount you’ll have to pay out of pocket before insurance pays for a covered claim. Most insurers offer multiple options such as $500, $1,000, or $5,000. That said, $1,000 is the most common deductible amount.

  • What home improvements are tax deductible?

    Improvements you make to your home to accommodate the needs of an occupant with a disability may be deductible as a medical expense. For example, lowering or modifying kitchen cabinets and equipment for use by someone in a wheelchair, or installing grab bars in a bathroom for a user with mobility issues, could qualify as a deductible medical expense.

  • Are homeowners association fees tax deductible?

    It depends. Homeowners or condo association fees that you pay on a primary residence aren’t tax deductible. But if you use a home as a rental property, then you can claim HOA fees as a business expense and deduct them. If you only rent out part of your home, then you can deduct a portion of the fees.[1]

  • Is private mortgage insurance tax deductible?

    Private mortgage insurance (PMI) is a type of insurance policy you may need if you get a conventional home loan and put down a down payment of less than 20%. PMI payments on primary residences are no longer tax deductible. But landlords can claim PMI payments as a deductible business expense on a rental property.

  • Are any home expenses tax deductible?

    Yes. Homeowners who itemize their tax returns can deduct mortgage interest payments and up to $10,000 paid toward property taxes. Homeowners who sell their homes can also avoid capital gains taxes on up to $250,000 in profit ($500,000 for joint filers). Tax credits are also available for homeowners who install energy-efficient features in the home.

Sources

  1. IRS.gov. "Know what’s deductible after buying that first home, sweet home."
  2. IRS.gov. "Business Use of Home."
  3. IRS.gov. "Tips on Rental Real Estate Income, Deductions and Recordkeeping."
  4. IRS.gov. "Helpful tips for deducting casualty and theft losses."
  5. Congressional Research Office. "Reference Table: Expiring Provisions in the “Tax Cuts and Jobs Act” (TCJA, P.L. 115-97)."
  6. IRS. "Topic no. 503, Deductible taxes."
  7. IRS. "Simplified option for home office deduction."
  8. IRS. "Publication 502 (2023), Medical and Dental Expenses."
Kim Porter
Kim Porter

Kim Porter is a writer and editor who's been creating personal finance content since 2010. Before transitioning to full-time freelance writing in 2018, Kim was the chief copy editor at Bankrate, a managing editor at Macmillan, and co-author of the personal finance book "Future Millionaires' Guidebook." Her work has appeared in AARP's print magazine and on sites such as U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, and more. Kim loves to bake and exercise in her free time, and she plans to run a half marathon on each continent.

Evelyn Pimplaskar
Edited byEvelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

Featured in

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