Are closing costs on a house tax-deductible?​

While most closing costs on a house are not tax-deductible, there are a few things you pay for when finalizing your home purchase that may be tax-deductible. 

Closing costs are expenses that homebuyers need to pay when completing the transaction. These closing costs can range from 2% to 6% of the home’s purchase price. You will learn what your closing costs will be during your mortgage process. 

To take advantage of tax deductions when closing on a home, make sure you itemize your deductions and speak with a tax professional. 

To start your mortgage process and learn what your closing costs may be, start your home loan application today. 

If you are filing taxes for the year you have closed on your home, these are the closing costs you can look at deducting. 

Mortgage points are a great option for a buyer looking to reduce the interest they pay every month, and they are tax-deductible. 

You can buy mortgage points at the time of closing your loan. Each point costs 1% of your total loan amount and could reduce the interest you pay by 0.25%. This will reduce the amount of interest you pay each month and over the life of your loan. Think of buying points as prepaying your interest. 

You will be allowed to deduct the entire amount you put toward your mortgage points on your primary residency for the year that you close on your home. 

Property taxes can be deducted on your taxes. 

Every year that you pay property taxes on any homes you own, you can deduct up to $40,000, depending on your income level and property value. When you buy a home, you will normally have to pay property taxes prorated from the time when you close on the property. 

HOA fees and utilities such as water or trash are not considered property taxes and cannot be deducted. 

Mortgage insurance premiums (MIPs) are permanently tax-deductible on federal returns as of the 2026 tax year. 

A MIP is typically mandatory for buyers who make a down payment of less than 20% on certain loans. You will have to pay these costs when closing on your home.   

Unfortunately, most closing costs are not tax-deductible. 

Closing costs are an important part of the homebuying process as they help the services and paperwork needed to finalize your purchase. Your closing costs are not a part of your down payment but will have to be made when you finish your home loan. Unfortunately, most of the items that make up closing costs are not tax-deductible. 

The closing costs you can look at deducting are mortgage points, property taxes and mortgage insurance premiums. To find out if any other expenses or closing costs could be tax-deductible talk to a tax expert. 

Just because most closing costs are not tax-deductible does not mean that they can’t save you money later*. 

Non-deductible closing costs could help you reduce your capital gains tax when you sell your home. While not all closing costs can be deducted from your capital gains tax, they can offset some of the taxes you will pay. You can add these closing costs you paid, as well as the costs of any home improvements you’ve made, to your cost basis. 

Seller-paid closing costs cannot be deducted from a buyer’s taxes. 

If you are purchasing a home, you will not be able to deduct any costs a seller pays from your taxes. However, you may be able to use them in your capital gains taxes when selling your home. Consult a tax expert to learn which deductions you may be able to get when selling your home. 

Starting in 2026, funding fees on VA of FHA loans** could be tax-deductible. 

Eligible borrowers may be able to deduct funding fees from their federal taxes beginning in 2026. The deductible amount will be based on a borrower’s income level and whether they choose to itemize their deductions. 

When looking to deduct your closing costs, you will need to make sure that you have your settlement statement readily available.  

Your settlement statement will break down all fees and expenses you paid during your home closing. From this document, you can identify costs that could be deductible, such as mortgage points, property taxes and mortgage insurance premiums. 

If you are looking to deduct closing costs from your taxes, you will need to start by learning how much you will pay in closing costs and finding out which could qualify for tax deductions. 

If you are looking at buying a home, starting a home loan application will connect you with a Loan officer who can give you an idea of how much you might pay in closing costs. From there, you would get an idea of how much you might be able to deduct from your taxes. To find out exactly what you can deduct from your taxes, make sure you talk to a tax expert. 

To learn what your closing costs might be and to speak with a Loan Officer, start your home loan application. 

_{*Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Restrictions apply.} 

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_{Information provided is for educational purposes only. It should not be construed as financial or legal advice or instruction. Rate does not guarantee or assume liability for the accuracy, completeness or timelines of the information. You should conduct additional research before making any mortgage related decisions.}