If you own a home, you may be able to deduct the property taxes you pay on your federal income tax return. Property taxes can lower your taxable income when you itemize deductions on Schedule A, but not every charge on your property tax bill qualifies.
What Real Estate Taxes Are Deductible?
You can deduct state and local real estate taxes on a personal-use property when the tax:
- Is based on the property's assessed value
- Is charged uniformly on similar properties throughout the taxing jurisdiction
- Pays for general government services and public welfare
- Applies to real property located in the United States
Deductible real estate taxes are claimed as an itemized deduction on Schedule A (Form 1040).
Keep in mind that special assessments for improvements that directly increase the value of your property, such as sidewalks, sewer lines, or water mains, generally aren't deductible as property taxes.
How to Enter Real Estate Taxes in the Software
You can enter personal-use real estate taxes in either of these locations:
- Federal → Deductions (Select My Forms) → Itemized Deductions → Mortgage Interest and Expenses
- Federal → Deductions (Select My Forms) → Itemized Deductions → Taxes You Paid → Additional Real Estate Taxes for Non-Business Property
Both options allow you to enter property taxes separately for multiple homes.
For tax years 2020 through 2022, adding a new real estate tax entry may overwrite an existing amount already entered.
SALT Deduction Limit for 2026
Real estate taxes are included in the State and Local Tax (SALT) deduction, which combines:
- State and local income taxes or sales taxes
- State and local real estate taxes
- State and local personal property taxes
For tax year 2026, the maximum SALT deduction is:
- $40,400 for most filers
- $20,200 for Married Filing Separately
The deduction may be reduced for higher-income taxpayers, but not below certain minimum amounts. The software automatically applies any required limitation.
Personal-Use Foreign Property
Property taxes paid on a foreign personal residence or vacation home aren't deductible on Schedule A. They also don't count toward the SALT deduction limit.
Rental, Business, or Investment Property
Foreign real estate taxes may be deductible when the property is:
- A rental property
- Used in a trade or business
- Held to produce income
These expenses are generally reported with the property's income and expenses, such as on Schedule E for rental property.
Real Estate Taxes on Rental Properties
If your property is a rental, real estate taxes are generally:
- Fully deductible as a rental expense
- Reported on Schedule E
- Not subject to the SALT deduction limit
- Deductible whether the property is located in the United States or abroad
This treatment applies because the taxes are a business or income-producing expense rather than a personal itemized deduction.
Mixed-Use Properties
If you use a property both personally and as a rental:
- Deduct the rental portion of real estate taxes as a rental expense on Schedule E.
- Deduct the personal portion on Schedule A if the property is located in the United States and you itemize deductions.
Be sure to allocate the expenses between personal and rental use using a reasonable method based on usage.
Refunds and Rebates
If you receive a refund or rebate of property taxes, reduce your deduction only when the refund relates to taxes paid during the same tax year.
Property-Related Charges That Aren't Deductible
Do not include these expenses as real estate taxes:
- HOA dues
- Trash collection fees
- Water or utility charges
- Homeowners insurance
- Property maintenance fees
- Service charges billed to specific properties
These costs aren't considered deductible property taxes for Schedule A purposes.