You can deduct any points that you or the seller pay for your original home loan for the year you pay them. Property taxes and interest are deductible when paid. Be sure to look for any property taxes or interest that you pay at closing.
While other home-buying costs, such as closing costs, are not immediately tax-deductible, they can be added to the adjusted cost basis of your home when you sell, thereby reducing any potential capital gain. These fees include title insurance, loan-application fees, credit reports, appraisal fees, service fees, settlement or closing fees, bank attorney's fees, attorney's fees, document preparation fees, and recording fees.
If you pay points to refinance your home, you can deduct the points over the life of the loan.
