Tax Tips for Military Homeowners: Maximize Your Benefits
Owning a home comes with many financial advantages—but if you’re in the military, those benefits can go even further. Understanding how homeownership affects your taxes is key to making the most of your investment and protecting your hard-earned money. This guide outlines essential tax tips for military homeowners, including common deductions and exclusive benefits designed for active duty service members and veterans.
General Tax Deductions for Homeowners
Whether you’re in the military or not, owning a home opens the door to several tax deductions that can reduce your taxable income:
 Mortgage Interest Deduction
You can usually deduct the interest you pay on your mortgage—especially during the early years of your loan when interest makes up a large portion of your payments. This can lead to significant savings come tax season.
 Property Tax Deduction
Property taxes paid to your local government are typically deductible on your federal return. Keep in mind, the SALT (state and local tax) deduction is currently capped at $10,000.
 Capital Gains Exclusion
If you sell your primary residence, you may qualify to exclude up to $250,000 of profit from your taxable income ($500,000 if married filing jointly). To be eligible, you must have owned and lived in the home for at least two of the last five years—unless you’re in the military (more on that below).
Special Tax Benefits for Active Duty Military Members
Military members on active duty receive some unique tax breaks that can make homeownership even more rewarding:
 Extended Capital Gains Exclusion
The IRS offers an exception to the “two-out-of-five-year” rule for those on qualified extended duty. Thanks to the Servicemembers Civil Relief Act (SCRA), you can suspend the residency requirement while stationed away from your home due to PCS orders. That means you may still qualify for the capital gains exclusion—even if you haven’t lived in the home for two years.
 Moving Expense Deductions
If you’re relocating because of a Permanent Change of Station (PCS), you may be able to deduct unreimbursed moving expenses, such as the cost of transporting household goods. Just make sure to keep thorough records and receipts.
Homeownership Tax Benefits for Veterans
Veterans also have access to valuable homeownership-related tax breaks, often at the state level:
 Property Tax Exemptions
Many states offer property tax exemptions or reductions for disabled veterans, potentially saving thousands of dollars annually. The level of exemption may vary based on your disability rating and state laws.
 No Private Mortgage Insurance (PMI) with a VA Loan
When you use a VA loan to purchase a home, you’re typically not required to pay PMI, which can save hundreds of dollars per month over the life of your loan. That’s more money staying in your pocket—where it belongs.
Final Thoughts: Get Professional Advice
Tax laws are complex and ever-changing, especially when it comes to military benefits. That’s why it’s always a good idea to consult with a qualified tax professional or financial advisor familiar with military tax rules. They can help you navigate your unique situation and ensure you’re maximizing every available deduction and credit.
Bottom Line:
Whether you’re active duty, a veteran, or a military family member, understanding the tax implications of homeownership can make a major difference in your financial planning. With the right guidance, you can enjoy the rewards of owning a home—while keeping more of your hard-earned income.