Owning a home can come with valuable tax benefits—but many of them have rules, limits, and eligibility requirements. Whether you’re a longtime homeowner or buying a home in Upstate South Carolina for the first time, understanding these deductions can help you plan smarter.

Below are 8 common tax deductions Greenville homeowners should know about in 2026.

1. Mortgage interest deduction

If you itemize your taxes, you may be able to deduct the interest you pay on a mortgage used to buy, build, or substantially improve a home.

In the early years of a mortgage, a large portion of your monthly payment goes toward interest—this is what may be deductible.

Key rules:

• Applies to primary residences
  
• Can apply to a second home if the loan meets IRS rules
  
• Interest is deductible on up to $750,000 of total mortgage debt ($375,000 if married filing separately)
  

This deduction is one of the most common benefits used by Greenville homeowners who itemize.

2. Private Mortgage Insurance (PMI) deduction (NEW in 2026)

Under the Big Beautiful Bill, PMI premiums become deductible again starting in 2026.

This is especially relevant for:

• First-time buyers

• Buyers who put down less than 20%

• Buyers using conventional or FHA-style financing

Important notes:

• PMI is treated similarly to mortgage interest

• Income limits may apply

• You must itemize to claim this deduction

For many buyers in the Greenville and Upstate South Carolina market, this change restores a meaningful tax benefit that had previously expired.

3. Home equity loan or HELOC interest

A home equity loan or HELOC lets you borrow against the equity in your home.

You may deduct the interest on these loans only if the funds were used to buy, build, or substantially improve the home securing the loan.

Important for 2026:

• The overall $750,000 mortgage debt limit still applies

• Using a HELOC for personal expenses (credit cards, travel, tuition) generally does not qualify

This is an area where many homeowners make assumptions—checking with a tax professional is wise.

4. Discount points (mortgage points)

Mortgage points—also called discount points—are fees you pay upfront to lower your interest rate.

Because points are considered prepaid interest, they may be deductible if you itemize your taxes.

Good to know:

• Points may be deducted in full or spread out over time, depending on the loan
  
  

Other closing costs (origination fees, appraisal fees, etc.) are not deductible

5. Property taxes (SALT deduction)

Homeowners can deduct certain state and local taxes (SALT), including property taxes.

Starting in 2026, the SALT deduction limit increases to $40,000, which is a big change from prior years.

For most Greenville homeowners, this deduction may still be modest compared to high-tax states—but it can add up when combined with mortgage interest and other itemized deductions.

6. Necessary home improvements (medical-related)

Some home improvements may qualify as deductible medical expenses if they are made for health or accessibility reasons.

Examples include:

• Installing ramps or handrails
  
  
• Widening doorways for wheelchair access
  
  
• Adding certain medical equipment
  
  

Cosmetic upgrades (like kitchen renovations or decks) do not qualify.

7. Home office expenses (self-employed only)

If you are self-employed and use part of your home regularly and exclusively for business, you may qualify for a home office deduction.

Two options are available:

• Simplified method: $5 per square foot (up to $1,500)
  
  
• Actual expense method: deduct a percentage of mortgage interest, utilities, insurance, and other costs
  
  

This deduction does not apply to W-2 employees working from home.

8. Capital gains exclusion when selling your home

If you sell your primary residence for a profit, you may be able to exclude:

• Up to $250,000 in capital gains (single filers)
  
• Up to $500,000 (married filing jointly)
  

To qualify, you must have owned and lived in the home for at least two of the last five years.

This is one of the most powerful tax benefits for homeowners in Greenville and across Upstate South Carolina.

Common home expenses that are not tax deductible

Not every home-related cost qualifies. These expenses are generally not deductible:

• Homeowners insurance

• Fire insurance premiums

• The principal portion of your mortgage payment

• Utilities (unless part of a rental or home office)

• Down payments

• Routine maintenance on a primary residence

The bottom line for Greenville homeowners

Tax deductions can help make homeownership more affordable. Before claiming them, make sure your itemized deductions add up to more than the standard deduction.

For many people buying a home in Upstate South Carolina, the biggest tax advantages come from:

• Mortgage interest
  
• Property taxes
  
• Capital gains exclusions when selling
  

A trusted tax professional—and a knowledgeable Greenville real estate agent—can help you understand how these benefits apply to your specific goals.

*** This article is for informational purposes only and is not tax or legal advice. Always consult a licensed tax professional or financial advisor regarding your individual situation.