Yes, you can deduct the interest on a construction loan that was not secured by the property you built on. You can also deduct property taxes paid during construction. You can treat a home under construction as a qualified home for a period of up to 24 months, but only if it becomes your qualified home at the time it is ready for occupancy. The 24-month period can start any time on or after the day construction begins. You probably will not receive a Form 1098 from your lender, because it is a "construction loan" and not a mortgage loan.
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