Tax Season is around the corner … Tax Deductions & Credits Every San Diego Homeowner Should Know

Owning a home in San Diego is a major investment—and one of the perks many homeowners forget about is the tax advantages that come with it. From mortgage interest to energy-efficient upgrades, these benefits can help reduce your annual tax bill and make homeownership more affordable over time.

Below is a helpful overview of common tax deductions and credits available to San Diego homeowners. As always, tax rules vary, so be sure to consult your CPA or tax professional before filing.

Mortgage Interest Deduction

If you own a primary residence, and possibly a second home, you may be able to deduct the interest paid on your mortgage, subject to current IRS limits. To claim this benefit, you’ll need to itemize your deductions rather than take the standard deduction.

With higher home prices common throughout San Diego County, mortgage interest can be significant—so it’s worth running the numbers to see which option benefits you most.

Property Tax Deduction

Property taxes paid on real estate may be deductible (within IRS limits). When you purchase a home, review your closing statement carefully. If you reimbursed the seller for prepaid property taxes covering a time when you owned the home, that amount may count toward your deduction.

This is especially relevant in higher-tax areas such as coastal and luxury neighborhoods.

Energy-Efficient Home Improvement Tax Credits

Homeowners often invest in upgrades that improve comfort and efficiency—and some of these improvements may qualify for federal tax credits.

Eligible upgrades may include:

• Energy-efficient windows
• Heat pumps or HVAC systems
• Water heaters
• Roofing improvements

Unlike deductions, tax credits directly reduce your tax bill, making them especially valuable.

Rental & Investment Property Tax Benefits

If you own a rental or investment property in San Diego, many of your expenses may be deductible against rental income, including:

• Mortgage interest
• Insurance
• Utilities
• Repairs and maintenance
• Marketing and advertising
• Property management fees
• Depreciation

With strong rental demand, these deductions can play a major role in overall cash flow.

Home Office Deduction

If you use part of your home exclusively and regularly as your principal place of business, you may qualify for a home office deduction. This can include a portion of utilities, insurance, and maintenance costs.

Because the rules are specific, professional tax guidance is highly recommended.

Tax-Free Rental Income (The 14-Day Rule)

If you rent out your primary residence for 14 days or fewer per year, that rental income may be completely tax-free and does not need to be reported. This can be especially useful for homeowners near beaches, events, or high-demand vacation areas.

Final Thoughts:

Homeownership comes with more financial advantages than many people realize. Taking the time to understand—and properly apply—these tax benefits can make a meaningful difference in your overall financial picture.

If you’d like a referral to a trusted CPA or tax advisor, I’m happy to connect you with someone local—just reach out anytime at catherine@catherinecatherineolive-com