Can I deduct real estate tax?
Yes, you can deduct real estate tax (also called property tax) if you:
- Own the property for personal use (not for rental or business use), and
- Itemize your deductions
You can deduct real estate tax for your main home, vacation homes, land, or any other immovable property you own. You can also deduct it for property you own in a foreign country.
You’ll want to claim the deduction in the year you actually made the payment. For example, if you paid your 2016 property tax on December 14, 2015, you’ll claim the deduction on your 2015 tax return.
No, you can’t deduct real estate tax if:
- You paid it for a property you don’t own
- It’s for a rental property or business property (claim it as an expense, not deduction)
- The assessment was for local improvements, like streets or sidewalks
- It’s not directly related to the property value, like trash collection or library taxes
- It's deposited in your lender's account but not yet paid on your behalf
Other things to note:
- Co-op members should only claim their share of the amount paid by the corporation
- Multiple owners of the property should split the deduction according to what each person paid
- School taxes are deductible only if they are based on the assessed value of your property