The military taxpayer can deduct mortgage interest and real estate taxes as an itemized deduction, even if they are paid with non-taxable military housing allowance pay.

Any home mortgage interest is, however, still subject to the general rules for deducting home mortgage interest. The Tax Cuts and Jobs Act of 2017 (TCJA) limits the real property tax and state/local income or sales tax deductions to $10,000 annually, effective 2018 through 2025.