Claiming Property Taxes on Your Tax Return

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Personal property taxes

Some states, cities and counties assess property taxes on various types of property you own that produce income, such as tools and other equipment. Every local district has its own list of what type of property is taxed and specifies how taxpayers should determine the item’s taxable value.

For example, Miami-Dade County in Florida requires taxpayers to use the fair market value of the property as the taxable value.

Real property taxes

Homeowners who itemize their tax returns can deduct property taxes they pay on their main residence and any other real estate they own.

  • This includes property taxes you pay starting from the date you purchase the property.
  • The official sale date is typically listed on the settlement statement you get at closing.

However, if you agree to pay the seller’s delinquent taxes from an earlier year at the time you close the sale, you are not permitted to deduct them on your tax return. This payment must be treated as part of the cost of buying the home, rather than as a property tax deduction.

Beginning in 2018, the total amount of deductible state and local income taxes, including property taxes, is limited t $10,000 per year.

Non-deductible real property charges

Certain items on your real estate property tax bill may look like taxes but are actually miscellaneous charges that are not deductible. These include:

  • Fees for the delivery of a service, such as water, or trash collection
  • Flat fees to satisfy fines, such as a charge to mow your lawn that wasn’t compliant with local law
  • Assessments for local benefits, such as a charge to construct a sidewalk outside your house

You can deduct costs of maintenance and repairs, however, only if the tax authority itemizes these amounts in your bill.