How Can I Deduct Home-Equity Interest Under the New Tax Law?
Still want to tap your home equity and deduct the interest? Options remain.

Note: The editors of Kiplinger's Personal Finance magazine and the Kiplinger Tax Letter are answering questions about the new tax law from subscribers to our free Kiplinger Today daily email. See other reader Q&As about the new tax law, or submit your own question.
Question: I understand that the new tax law eliminates the deduction of interest on home-equity loans. But, will there be an exception if the loan is used to improve a home, such as remodeling or building an addition?
Answer: Yes. As in the past, home-equity loan proceeds used to substantially improve a home are considered acquisition indebtedness, so the debt falls under the rules that permit interest on up to $750,000 of such debt to be deducted. For debt secured by a first or second home and incurred before December 15, 2017, interest on up to $1 million can be deducted. The $750,000 cap applies to debt incurred after December 14.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Under the old law, interest on home-equity debt that did not qualify as acquisition indebtedness (because it was used for purposes other than to buy, build or improve a first or second home) could be deducted. That’s the write-off Congress abolished, starting in 2018, for both new and old loans.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Nvidia Stock's Been Growing for Years. Just Look At Its 100,000% Return
Nvidia shareholders have had to stomach intense volatility over the years, but they have come out on top thanks to the AI chipmaker's bellwether status.
By Louis Navellier Published
-
The 'Concerning Trends' in Retirement Now
Americans are less satisfied with their life in retirement and cite inflation and higher healthcare costs as just two of the problems they're facing.
By Janet Bodnar Published
-
Tax-Deductible Home Improvements for Retirement in 2025
Retirement Taxes Your aging-in-place plan could benefit from the medical expense tax deduction. But watch out for capital gains and property taxes.
By Kate Schubel Published
-
Don’t Make These Five Mistakes on Your Tax Return
Tax Filing The IRS warns taxpayers to watch out for these common errors as they prepare to file.
By Gabriella Cruz-Martínez Published
-
You Don’t Want to Retire in Portugal: Here Are Three Tax Reasons Why
Retirement Taxes With the NHR benefit retiring and pension taxes increasing, you might rethink your retirement plans in Portugal.
By Kate Schubel Published
-
Why Abolishing Florida Property Taxes is Problematic
Property Taxes A bold proposal that aims to eliminate property taxes in the Sunshine State has roused concerns from economists, and rightly so.
By Gabriella Cruz-Martínez Last updated
-
First-Time Filing Taxes? Key Tax Tips to Know for 2025
Tax Filing Preparing your IRS taxes for the first time may seem daunting, but here are some return preparation and filing tips to start.
By Kate Schubel Last updated
-
Mail Theft Crisis: Why Your IRS Tax Refund Is At Risk
Tax Refunds Millions of dollars in tax refunds were stolen in the mail last year. Here's what you should know.
By Gabriella Cruz-Martínez Last updated
-
Ten IRS Audit Red Flags for Retirees in 2025
Retirement Taxes Retirees who think they can escape the IRS audit machine should think again.
By Joy Taylor Published
-
States with Emergency and Energy Sales Tax Holidays in 2025
Sales Taxes Save on appliances with a state emergency preparedness or energy-efficient tax-free weekend in February.
By Kate Schubel Published