In most cases, you can deduct your interest from a HELOC loan. How much you can deduct depends on the date of the loan, the amount of the loan, and how you use the loan proceeds. You'll need to meet some conditions:
- The loan or line of credit is secured (put up as collateral to protect the lender) by your main home or a second home.
- The loan or line of credit must be used to buy, build, or substantially improve your home. This requirement began with tax year 2018 and extends through 2025.
- You can only deduct the portion of the loan or line of credit you used to buy, build, or substantially improve the home that is used to secure the loan or line of credit. This requirement began with tax year 2018 and extends through 2025. If you’ve ever used part of this loan to pay for things other than this home, you cannot deduct the interest from that amount of the loan, even if the transaction didn’t take place this year.
- You or someone on your tax return must have signed or co-signed the loan.
- see more conditions
The IRS has more information on how much you can deduct and other relevant details.