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Property tax deduction

If you pay annual taxes on property, land or vehicles, you could qualify for this deduction.

Updated

Fact checked

The property tax deduction isn’t only limited to homeowners. Taxpayers owning land or vehicles could qualify for as long as they meet certain requirements. Here’s everything you need to know.

What is the property tax deduction?

The property tax deduction is a federal deduction that allows taxpayers to write off any state or local property taxes they owe, up to a certain amount.

The chart below shows what is and isn’t deductible under the property tax deduction:

Property taxes paid on…… are deductible.
Assessments for neighborhood repairs
Boats and planes
Co-op apartment
Delivery service fees for water and trash collection
HOA assessments
Home renovations
Land
Lawn care fees
Primary residence
Property located outside of the US
Property taxes you didn’t pay this year
Property taxes you don’t owe
Real estate
RV, cars, motorcycles and other vehicles
Vacation home

How much is the property tax deduction worth in 2019?

The combined total of your local, state and property taxes can’t be more than the limits in the chart below:

Property tax deduction limits 2019

Single, married filing jointly or head of householdMarried, filing separately
$10,000$5,000

Limits

Before 2018, you could write off 100% of your state, local, and property taxes. So if you pay $7,000 in state income taxes and $6,000 in property taxes, you could take a $13,000 deduction. But now you’re capped at $10,000 or $5,000 depending on your filing status.

How much was the property tax deduction worth in previous years?

The chart below outlines the property tax deductions for the past three years.

Property tax deduction limits

Single, married filing jointly or head of householdMarried, filing separately
2018$10,000$5,000
2017No limitNo limit
2016No limitNo limit

Who qualifies for the property tax deduction?

Anyone who pays local or state personal property taxes on a house, land or vehicle can claim this deduction as long as they meet these three rules as defined by Treasury Regulations:

  1. The tax is ad valorem
  2. The tax is imposed annually
  3. The tax is imposed on personal property

How to claim the property tax deduction

You use Schedule A to itemize your taxes and claim the property tax deduction. The process looks like this:

  1. Gather any financial documents that list fees for your home, land or vehicle.
  2. On line 5 of Schedule A, list your state and local taxes for income, real estate and property.
  3. Add up the total amount of taxes.

You can only claim up to $5,000 if you’re married and filing separately or $10,000 if you’re single, the head of the household or married and filing jointly.

What records should I keep?

Taxpayers claiming the property tax deduction should keep detailed records of any:

  • Bank statements
  • Escrow documents
  • Checks
  • Property tax statements
  • Vehicle registration statements

What to watch out for

If you want to claim the property tax deduction, keep these potential drawbacks in mind:

  • Some fees aren’t deductible. Sometimes property taxes include service fees and assessments, but these aren’t deductible.
  • Get credit in the year you paid them. You get to write off property taxes in the year you paid them, not in the year they were issued. So, if you pay next year’s taxes by December of this year, you can go ahead and write them off.
  • You’ll have to itemize. You can’t claim the property tax deduction if you take the standard deduction.

Compare tax filing services

Data indicated here is updated regularly
Name Product Federal returns starting price State returns starting price Maximum return guaranteed? Free options available? Photo import of W2? Live chat?
TaxSlayer
$17
$39
Yes
Yes
Yes
TaxSlayer offers free federal and state filing for simple returns and $0 federal return to service members filing with a military EIN.
Intuit TurboTax
$60
$50
Yes
Yes
Yes
No
File returns electronically and get taken step by step through the tax-filing process, so that you can receive the fastest refund possible for yourself, and/or your business.
Liberty Tax
$27.96
$29.95
Yes
No
Yes
Yes
Choose from EZ, Basic, Deluxe, and Premium packages to support the simplest or the most complicated of returns; including business and investments.
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Compare up to 4 providers

You may be able to reduce your tax bill even further if you qualify for these related deductions:

  • Mortgage interest deduction. You may be eligible to write off 100% of your mortgage interest if your loan is less than $1 million.
  • Mortgage points deduction. If you bought your house this year, you may be eligible to write off any money you paid for discounted points or origination fees.

Bottom line

The property tax deduction helps many taxpayers lower their tax bills — not just homeowners. You can claim up to $10,000 or $5,000 if you’re married and filing separately of your local, state and property taxes.

If you’re wondering whether it makes financial sense to claim the property tax deduction, consider hiring a professional or comparing online services that can calculate both your standard and itemized deductions, then tell you which saves you the most money.

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