Can I deduct property (real estate) taxes?
The information in this article pertains to tax year 2017. Find out how tax reform legislation changes the 2018 state, local, property and sales tax deduction at How will tax reform affect my 2018 federal tax return?
Yes, if you own the property, it’s for your personal use and you also itemize your deductions.
Deductible property (real estate) taxes include taxes paid at closing when buying or selling a home, as well as taxes paid to your county or town’s tax assessor (either directly or through a mortgage escrow account) on the assessed value of your property.
Deduct it for your:
- Main home
- Vacation homes
- Foreign property
You can't deduct it for:
- Property you don’t own
- Rental property or business property (claim it as an expense, not a deduction)
- Local improvements, like streets or sidewalks
- Trash collection, library taxes, or anything else not directly related to property value
Deducting Prior Year or Future Year Property Taxes
You can deduct prior year or future year property taxes during the year you make the actual payment – in certain situations. More info
Some more important info:
- If you pay your property tax with your mortgage, you can only deduct it after your lender has paid the tax on your behalf. You can contact your lender to find out when they typically make these payments. (For example a lender might make the payment in October to cover the total amount of the following year’s taxes; or they might make quarterly payments. It depends on the taxing authority in your location.)
- Co-op members: Only claim your share of the amount paid by the corporation
- Multiple owners: Split the deduction by what each person paid
- School taxes are deductible only if they are based on the assessed value of your property