Buying your first home is a big moment, and if you’re settling into Newport Beach or exploring your options here, you’re probably looking for ways to ease some of the upfront costs. One helpful place to start is understanding the tax deductions and credits that may be available to new homeowners. These won’t eliminate the expenses that come with buying a home, but they can take some pressure off come tax season.

If you already know your expected mortgage interest rate or you’re getting pre-approved, you can start getting a sense of which deductions might apply to you.

Mortgage interest deduction

This is one of the most common tax benefits for new homeowners. You may be able to deduct mortgage interest on the first $750,000 of your loan. Married couples filing separately can each deduct interest on up to $375,000.

If your home was purchased before December 16, 2017, you may qualify for higher limits. A second home can sometimes qualify as well, as long as it meets IRS rules about being a residence. For buyers in higher-priced areas like Newport Beach, this deduction can have a meaningful impact.

Property tax deduction

You may be able to deduct up to $10,000 in combined state and local taxes, including property taxes. If you’re married and filing separately, the limit is $5,000 each.

Property taxes in coastal communities can be higher, so this is one deduction that often comes in handy for local homeowners.

Mortgage insurance deduction (no longer offered as of 2025)

This deduction ended in 2025. In previous years, it allowed homeowners to deduct PMI or MIP premiums. There is ongoing discussion about bringing it back, but as of now it’s not available.

Energy-efficient home improvement credits

If you’re planning upgrades, you may qualify for a credit worth 30% of eligible energy-efficient improvements. Credits usually max out around $1,200, with some items—like heat pumps or boilers—qualifying for up to $2,000.

Before moving forward with upgrades, double-check that the materials or equipment you’re planning to use meet IRS requirements. Newly built homes and homes used for business may not qualify.

Other Ways First-Time Buyers Can Save

Beyond tax deductions, there are programs that can help lower the upfront cost of buying your first home in Newport Beach or elsewhere in Orange County:

Down payment assistance

State and local agencies may offer grants or low-interest loans to help with your down payment.

Government-backed loans

FHA, VA, and USDA loans can offer lower down payment options and may make qualification easier for some first-time buyers.

Check state programs

California offers several programs aimed at helping new homebuyers with down payment support, credits, or favorable terms. It’s worth looking into what’s currently available when you start planning your purchase.

Starting Your Homebuying Journey in Newport Beach

Getting pre-approved early helps you understand your budget, estimate your monthly payment, and gives you a clearer idea of which deductions or credits might apply later. And when you’re navigating a market as specialized as Newport Beach, working with a local expert makes the entire experience smoother.

If you ever want help exploring neighborhoods, connecting with lenders, or preparing for your first purchase, I’m here to guide you through every step.

Disclaimer

This information is meant to provide a general overview of common tax considerations for new homeowners. It is not a substitute for guidance from a CPA or tax professional. Everyone’s financial situation is different, so please consult a qualified tax adviser before making decisions about deductions, credits, or tax planning.