Property Taxes covered by seller concessions

[QueenFlappy]

I purchased a home in 2025 and had to pay a prorated share of property taxes as part of the closing costs.  I also pre-paid the next installment of property taxes at closing which would be 100% payable by me (these would normally be due in February 2026).  I know that normally I would be able to deduct this amount when I file my 2025 taxes (assuming that I itemize).  I received seller concessions that covered all of my closing costs, including my share of the property taxes (the seller concessions were actually more than my original closing costs which is why I made the additional property tax payment).  Can I still claim these taxes when I file or not?  Do the concessions essentially get treated as a reduction in purchase price (and the property taxes are claimed as normal), or since the seller technically paid these taxes and not me do I not get the deduction?  The way I see it, the county just knows that my share of the taxes were paid by the escrow company as a normal part of the sale (they don't necessarily know about any seller concessions) so I should still get the deduction, but I wanted to sanity check that my understanding is correct with a bunch of strangers on the internet 🙂

[Bsch4477]

You can deduct the property tax paid for the period that you owned the property even though the seller paid it. 

[Opus 17]

The seller concessions are simply treated as a reduction in the purchase price.  You are allowed to claim a tax deduction for property taxes assignable to the dates you owned the property, as if you paid them directly to the assessor, even if someone else paid them.  Likewise, the seller is only allowed to deduct the portion of taxes assignable to the dates they owned the property, even if they paid the entire year and did not get a credit back from the buyer.   (It's part of the law that only the owner can deduct the property taxes, so when the owner changes, the deduction is split on a pro-rated basis.)

You do need to be aware of when taxes are calculated and paid in your area.  For example, in New York State, county taxes are calculated from January 1 and payable by Feb 15, while school taxes are calculated from July 1 and payable in September (I think).  Which means that if you buy a home in June, you could claim a deduction for about 7/12ths of the county taxes, plus 1/12 of the school taxes from the previous year, plus the entire school tax bill that was paid the September after you bought the home.    

[QueenFlappy]

We just have the 1 county tax (no separate school tax) that's paid twice a year.  The 2nd installment for 2025 was pro-rated in escrow so that I paid for the time corresponding to my ownership (the seller paid the full amount to the county and then was reimbursed for my portion via escrow).  And then the 1st 2026 installment should have been fully paid by me next year, but I needed to add in extra closing costs (or lose part of the seller concessions) so I paid it via escrow, but I'm 100% certain that amount solely corresponds to the time when I'll own the house.  I'm pretty clear on what's my amount and what's theirs, I just didn't know if the seller concession affected who could claim on their taxes.

[Opus 17]

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@QueenFlappy wrote:

We just have the 1 county tax (no separate school tax) that's paid twice a year.  The 2nd installment for 2025 was pro-rated in escrow so that I paid for the time corresponding to my ownership (the seller paid the full amount to the county and then was reimbursed for my portion via escrow).  And then the 1st 2026 installment should have been fully paid by me next year, but I needed to add in extra closing costs (or lose part of the seller concessions) so I paid it via escrow, but I'm 100% certain that amount solely corresponds to the time when I'll own the house.  I'm pretty clear on what's my amount and what's theirs, I just didn't know if the seller concession affected who could claim on their taxes.

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Your deduction is not what you paid in escrow, because money in escrow still technically belongs to you until it is paid to the county.  If your tax year is Jan 1-Dec 31, then your deduction for 2025 is a percentage of the total tax based on the number of days you owned the home.  For example, if you closed on Sept 25, 2025 (with 96 days remaining) your deduction would be 96/365=26.3% of the tax bill.  Regardless of how much you paid into escrow.

Then, your 2026 tax that will be subtracted from escrow in February 2026 will be deductible on your 2026 return, even though you have already paid into escrow.