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Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)

Question: Is the mortgage interest and property tax on a second residence deductible?

Answer:

The mortgage interest on a second home, which you do not rent out during the taxable year, is generally deductible if the interest satisfies the same requirements for deductibility as interest on a primary residence.  If you rent out the residence, you must use it for more than 14 days or more than 10% of the number of days you rent it out, whichever is longer.

  • The combined limitation for mortgage interest on your primary and secondary residence is $1,000,000 for acquisition indebtedness and $100,000 for home equity indebtedness.
  • Real estate taxes paid on your primary and second residence are generally deductible.
  • Deductible real estate taxes include any state, local, or foreign taxes based on the value of the real property levied for the general public welfare.
  • Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property, such as assessments for sidewalks, water mains, sewer lines, parking lots, and similar improvements.

Additional Information:


Category: Itemized Deductions, Standard Deductions
Subcategory: Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)

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The OMB number for this study is 1545-1432.
If you have any comments regarding this study, please write to:
IRS, Tax Products Coordinating Committee
SE:W:CAR:MP:T:T:SP
1111 Constitution Avenue NW
Washington, DC 20224