One of the biggest questions we get asked here at Five Stone is, “Is my property tax deductible?” And though there’s no hard-and-fast answer, for most homeowners: yes, you can deduct the property taxes you’ve paid from your annual tax returns.
There are a few catches, however. First, it must be a personal property you own — either your primary residence, your vacation home, or a plot of land under your name. You can’t deduct the taxes if it’s a rental, commercial, or business property, and you can’t deduct associated costs like improvements to streets/sidewalks or trash/utility taxes.
In order to deduct your property taxes, you’ll also need to itemize your returns, something not everyone does (or should do). It’s important to talk with your accountant if you’re considering deducting property taxes, to ensure that it’s the right move for your personal finances.
A few other notes regarding deductible property taxes:
- You can deduct taxes that are paid at closing directly to your county/municipality or through an escrow account.
- The current administration is working on changes to the tax plan. This could impact what deductions homeowners are eligible to take in the coming years.
- If your property is owned by multiple parties, you can only deduct the share of taxes you actually
- Local school district taxes can also be deducted, as long as they’re based on the home’s assessed value with the city.
Remember, just because property taxes may be deductible, that doesn’t mean you should pay them blindly. In today’s competitive market, many homes are being over-appraised, and that means you may be paying more in taxes than you rightfully should.
At Five Stone, we make protesting your property taxes an easy and seamless process, so you never pay more than you should for your property — whether you plan to deduct those expenses or not. Fill out our quick contact form today to get started on your protest.