Non-deductible residential expenses include any type of insurance, including private mortgage insurance (PMI) and property insurance premiums, even though the coverage generally is required as part of the home loan and included as a portion of your monthly payment.

Homeowner association dues, any additional principal payments you make, depreciation of your home, general closing costs and local assessments to increase the value of your neighborhood, such as construction of new sidewalks or utility connections are also not deductible.

In addition, you cannot deduct home improvements and repairs.  However, do hold onto the receipts. If your property appreciates beyond the $250,000 ($500,000 for married couples) amount the IRS will let you keep tax free when you sell, the records of property improvements could help you establish a higher basis for your house and reduce your taxable profit.