Can I Claim My Property Taxes on My Tax Return?

You can claim property taxes on your tax return if you itemize deductions on Schedule A, and the amount you can take is limited by the federal cap on state and local taxes. For the 2026 tax year, that cap is $40,400 for most filers and $20,200 for married filing separately, a sharp increase from the $10,000 limit that applied from 2018 through 2024.¹ Whether claiming the deduction actually lowers your bill depends on your other itemized expenses, your income, and which charges on your tax bill the IRS considers deductible.

Itemize or Take the Standard Deduction

Property taxes only produce a tax benefit if you file Schedule A instead of claiming the standard deduction.² The standard deduction is a flat amount tied to filing status. For 2026 it is $32,200 for married filing jointly, $16,100 for single and married filing separately, and $24,150 for head of household.¹

Itemizing pays off only when your combined deductible expenses (property taxes, state income or sales taxes, mortgage interest, charitable gifts, qualifying medical costs) exceed the standard deduction for your status. If property taxes are your only major deductible expense, the standard deduction almost certainly gives you more. This is worth checking each year: the standard deduction adjusts for inflation while your itemizable expenses fluctuate, so a year with a large charitable gift or heavy medical bills can flip the math.

What Counts as a Deductible Property Tax

The IRS allows a deduction only for real property taxes that are based on the assessed value of the property and levied for general public purposes, and the tax must be charged at a like rate on all property in the jurisdiction.³ Taxes on both a primary home and a second home qualify.⁴

Several charges that commonly show up on a property tax bill are not deductible:

Special assessments for improvements that increase your property’s value, such as new sidewalks, sewer lines, or street paving. Those costs get added to the home’s cost basis instead, which reduces taxable gain when you sell.³
Service charges for water, sewer, and trash collection, even when bundled into a tax bill.³
HOA and condo association fees.⁵
Real estate taxes on property located outside the United States. Foreign property taxes have not been deductible as an itemized deduction since 2018.⁶

Read your bill carefully. Many jurisdictions lump deductible and non-deductible items into a single payment. If the breakdown isn’t clear, ask your local tax assessor’s office to identify the deductible portion.⁷

The SALT Cap Limits How Much You Can Deduct

Real estate taxes aren’t deducted in isolation. They’re combined with your state and local income taxes (or state sales taxes if you elect those instead) and any deductible personal property taxes into a single total, and that total is capped. This is the State and Local Tax cap, or SALT cap.

For the 2026 tax year, the cap is $40,400 for most filing statuses and $20,200 for married filing separately.¹ Congress raised these figures from the $10,000 level in the One Big Beautiful Bill Act, signed in mid-2025.

The higher cap comes with an income phasedown. Once modified adjusted gross income exceeds $505,000 in 2026, the $40,400 cap shrinks by 30 cents for every dollar of income above the threshold. At roughly $606,000 in income, the cap bottoms out at $10,000. The floor for married filing separately is $5,000. If your household income sits well above $600,000, the expanded cap has little practical effect on your return.

When the Payment Counts

The property tax deduction is cash basis. You deduct taxes in the year you actually pay them to the taxing authority, no matter what period the bill covers. A December bill paid in January belongs on the following year’s return.

Escrow Accounts

If your mortgage servicer collects property taxes through escrow, you can only deduct the amount the servicer actually paid to the tax collector during the year, not the total you paid into escrow. Escrow accounts often carry a cushion, so the amount leaving your bank each month rarely matches what reaches the tax authority. Your annual escrow statement should show the taxes paid on your behalf; if it doesn’t, ask the servicer or the local tax office for the figure.⁸

Buying or Selling During the Year

When property changes hands mid-year, the IRS treats the property taxes as split between buyer and seller based on how many days each owned the home during the tax period.⁷ The closing disclosure spells out each side’s share. Who physically wrote the check to the tax collector doesn’t matter; the deduction follows days of ownership. Buy in August, and you deduct only the portion covering August through December.

Rental and Business Property Follows Different Rules

Property taxes on rental or business real estate aren’t personal itemized deductions at all. They’re ordinary business expenses, which means two things: they aren’t limited by the SALT cap, and you don’t need to itemize to claim them.

Taxes on rental real estate go on Schedule E.⁹ Taxes on property used in a sole proprietorship go on Schedule C.¹⁰ A landlord paying $25,000 in property tax on a rental building deducts the full amount against rental income with no cap applied. If part of your home is used exclusively for business, the corresponding share of property taxes may be deductible as a business expense, separate from your personal SALT calculation.

Condo and Co-op Owners

Condo owners generally get their own property tax bill and deduct it the same way any homeowner does. The unit is assessed on its own, and the standard rules apply.

Co-op shareholders take a different path. The co-op corporation owns the building and pays the property taxes, and as a tenant-stockholder you deduct your proportionate share of the taxes the corporation paid. That share is typically calculated by the percentage of the co-op’s total stock you own.¹¹ Some co-ops instead allocate based on the fair market value of each unit relative to the building. Either way, your monthly payment bundles taxes with maintenance and other costs, so you need a statement from the co-op identifying the deductible tax portion before claiming it.

Records to Keep

Hold onto documentation that proves both the amount you paid and that the payment went to a qualifying tax. The IRS expects you to have records available if questioned.⁷ Useful items:

Property tax bills showing the breakdown between deductible taxes and non-deductible service charges or assessments.
Proof of payment, such as canceled checks, bank statements, or online payment confirmations.
The annual mortgage escrow statement showing what your servicer paid to the tax authority.
Closing disclosures if you bought or sold a property during the year, since these establish the tax proration.
Co-op tax allocation statements identifying your share of deductible taxes.

Keep these records for at least three years after filing the return that claimed the deduction, which is the standard IRS audit window. If you underreported income by more than 25%, the window extends to six years.

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
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Internal Revenue Service. About Schedule A (Form 1040), Itemized Deductions
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Internal Revenue Service. Topic No. 503, Deductible Taxes
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Internal Revenue Service. Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses) 5
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Internal Revenue Service. Tax Benefits for Homeowners
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Office of the Law Revision Counsel. 26 U.S. Code 164 – Taxes
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Internal Revenue Service. Publication 530 (2025), Tax Information for Homeowners
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Internal Revenue Service. Publication 17 (2025), Your Federal Income Tax
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Internal Revenue Service. About Schedule E (Form 1040), Supplemental Income and Loss
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Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss From Business
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eCFR. 26 CFR 1.216-1 – Amounts Representing Taxes and Interest Paid to Cooperative Housing Corporation