If you’ve been wondering if there’s a tax credit for homeowners, the short answer is yes. The longer answer? You’ll need to move quickly.
Thanks to federal programs like the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit, many homeowners can still claim thousands in tax credits for energy-efficient upgrades. But here’s the catch: most of these incentives will vanish after December 31, 2025, following the passage of the One Big Beautiful Bill Act signed into law on July 4, 2025.
What tax credits are available to homeowners in 2025?
1. Energy Efficient Home Improvement Credit (Section 25C)
If you’ve upgraded your home with insulation, new windows, energy-efficient doors, or a heat-pump system, you could claim up to $3,200 in credits this year:
- Up to $2,000 for heat pump systems or heat pump water heaters
- Up to $1,200 for upgrades like insulation, doors, and windows
- Coverage for home energy audits to assess opportunities for savings
These are nonrefundable tax credits, which means they reduce what you owe in federal taxes, but won’t get you a refund if the credit exceeds your bill.
Deadline: Must be completed by December 31, 2025.
2. Residential Clean Energy Credit (Section 25D)
Thinking of installing solar panels, geothermal heating, or battery storage? This credit covers 30% of the total project cost, with no dollar cap.
Qualifying equipment includes:
- Solar panels
- Solar water heaters
- Geothermal heat pumps
- Wind turbines
- Battery storage systems
- Fuel-cell technology (principal residence only)
You can claim the credit on multiple projects in one year for both your primary residence and second home (excluding fuel-cell systems).
Deadline: Also expires December 31, 2025.
Why now is the time to act
When the new law was passed, it significantly shortened the lifespan of these credits. Under previous legislation, these benefits were available through 2032 or later. Now, they’re on the chopping block at the end of 2025.
What about other homeowner tax benefits?
If you’re not upgrading your home’s energy systems, there are still standard tax deductions available:
- Mortgage interest: Deduct interest on up to $750,000 of debt (or $375,000 if married filing separately).
- Property taxes: If you itemize your deductions, you can deduct the property taxes you pay on your main residence and any other property you own, limited to $40,000 for 2025 and subject to reduction depending on your income level.
- Capital gains exclusion: If you sell your primary home, you may be able to exclude up to $500,000 in profit from taxes (or $250,000 if filing separately).
- Home office deduction: If you work from home and use a dedicated space, you may deduct part of your utilities, maintenance, and other costs.
What about first-time homebuyer credits?
Unfortunately, there’s no federal tax credit for first-time homebuyers in 2025. That benefit ended in 2010. While it’s been proposed for reintroduction several times, no such credit is currently available or scheduled for return. However, some state-level programs and grants may still exist. Your tax advisor can help identify them.
Planning ahead: What homeowners should do now
The window is closing. If you’ve been on the fence about making energy upgrades, it’s time to get off the fence and onto a contractor’s schedule.
Key takeaways:
- Act before December 31, 2025, to take advantage of energy-related tax credits
- Review your mortgage and property tax deductions annually
- Talk to a professional to plan large purchases or potential home sales
- Don’t wait until tax time—some planning needs to happen months in advance
We can help you make the most of your tax benefits
We’ll help you maximize available credits, avoid costly mistakes, and plan for long-term savings. Contact us today to get a personalized tax strategy before these homeowner tax benefits disappear.