Can one deduct property taxes paid by the bank as part of refinance?

We refinanced our home loan last year and the refinancing bank agreed to pay the property taxes due and added the amount to the refinanced loan.

Can we still claim the property tax deduction even though it was paid by Bank in the short term but will essentially be paid by us?

posted

Yes. By adding the amount to the refinanced loan, the bank just acted as an agent in paying the property taxes. You are still liable and made payment. That is no different than paying the taxes by credit card.

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