Interest on a construction loan is deductible as home mortgage interest for up to 24 months as long as it becomes your qualified home at the time it is ready for occupancy. A qualified home is your main home or a second home that is not rented out.
When you prepare your taxes for 2023, you will enter the mortgage interest under Deductions and Credits, along with any other deductions you may have, such as real estate taxes or charitable contributions. The interest may help you get a larger refund if you are able to itemize. For 2023, the standard deduction amounts are $13,850 for single taxpayers and $27,700 for married taxpayers. If your total deductions, which include the mortgage interest, exceed the standard deduction amount, you will itemize your deductions to take the larger deduction.
I do want to mention that you can't deduct interest on land that you hold with the intention of building a home at some point in the future.
I would expect that you have already closed on the purchase of the land if you are paying interest on that loan.
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