Itemized deduction and buying a house

[Tony Th]

We purchased a house (first time) at the end of 2021.  Does the amount we put down on a house count towards an itemized deduction? 

[AamilD · Accepted solution]

No, the amount used as a down payment is not counted towards itemized deduction.

However, the amount of interest you pay on the mortgage is deductible and will count towards the itemized deduction. Only the interest paid on the first $750,000 of debt is deductible.

Additionally, any property taxes which you pay related to the mortgage can also be deducted and will be part of the itemized deduction. The maximum deduction which you can take on the property tax is $10,000, so if you pay anything above $10,000 that would not be allowed for deduction. 

Some other deductions which are available are the Points which you may have paid to the lender in order to get your mortgage. This can also be taken as part of itemized deduction.

If your down payment was less than 20% of your home's cost, you are sometimes required to pay Mortgage Insurance Premiums. You can also take a deduction of the premiums paid as part of itemized deductions.

Please visit Buying Your First Home for more information on the potential deductions available to first time home buyers.

Congratulations on your new home!