Property Tax Deduction

Last updated Mar 14, 2021

Tax payers can generally claim paid property taxes as a deduction on their federal income taxes. This includes yearly ad valorem taxes and excludes taxes charged on home renovations or services like water, electricity, etc.

In 2017, the Tax Cuts and Jobs Act capped this deduction at $10,000 (or $5,000 if married and filing separately).

How to claim

  • Must own the property and have paid taxes on it.
  • Taxes may include closing tax on buying or selling a home or the yearly ad valorem taxes.
  • Used property for personal use and not as a rental or commercial property. Personal use may include tax payer's main home, vacation home, land or foreign property.
  • Use itemized deductions on federal tax return.

Other considerations

  • Taxes paid over $10,000 cannot be claimed (or $5,000 if married and filing separately).
  • Taxes paid on property not owned by tax payer. This may include paying the seller's delinquent taxes after a purchase.
  • The lender is required to provide a Form 1098 which outlines what taxes paid qualify for the deduction.