Tax Day Is Almost Here: What Homeowners Need to Know for 2025 Filings

Tax Day is approaching fast. If you bought, sold, or owned a home in 2025, there are several housing-related tax items you may want to review before filing.

While every situation is different, here are a few key areas homeowners and sellers should keep in mind:

1. Mortgage Interest Deduction

Homeowners may be able to deduct interest paid on mortgage debt up to:

• $750,000 (or $375,000 if married filing separately) for homes purchased after December 14, 2017

• $1 million for mortgages that closed before December 14, 2017

To claim this deduction, you must itemize your taxes rather than taking the standard deduction.

For many homeowners, mortgage interest remains one of the most valuable tax benefits of owning a home.

2. State and Local Tax (SALT) Deduction

For 2025 filings, the SALT deduction cap increased to $40,000 for taxpayers with adjusted gross income under $500,000.

Previously capped at $10,000, this change may significantly benefit homeowners in areas with higher property taxes.

Like mortgage interest, this deduction requires itemizing.

3. Mortgage Insurance (PMI) Deduction

Homeowners can once again deduct mortgage insurance premiums (PMI).

PMI is typically required when a buyer puts down less than 20%. If this applied to you in 2025, it’s worth checking whether you qualify for this deduction.

4. Capital Gains Exclusion on Home Sales

If you sold your home in 2025, you may be able to exclude:

• Up to $500,000 in capital gains if married filing jointly

• Up to $250,000 if single

To qualify, you must have owned and used the home as your primary residence for at least two of the past five years.

This exclusion can significantly reduce (or eliminate) taxes owed after a home sale.

A Quick Reminder

Tax laws are complex and personal circumstances vary. It’s always best to consult a qualified tax advisor to understand how these rules apply to your situation.

If you have questions about the real estate side, whether you're thinking about buying, selling, or simply planning ahead, I’m always here as a resource.

If you’re thinking about buying, selling, or just want trusted local advice, Ritu Desai brings over 20 years of experience in the Northern Virginia market. She understands the neighborhoods, pricing trends, and strategies that help her clients move with confidence.

For knowledgeable guidance and a results-driven approach, connect with Ritu, your go-to real estate resource in Northern Virginia.