🏠Deductible Real Estate Taxes
You can deduct state and local real estate taxes if:
- They are based on the assessed value of the property
- They are levied for the public welfare
These typically include taxes on:
- Your primary residence
- A second home
- Land, boats, RVs, and other property assessed by value
đźš« Non-Deductible Charges
The following cannot be deducted as real estate taxes:
- Special assessments for improvements (e.g., sidewalks, sewer lines)
- Service fees (e.g., trash collection, water usage, lawn mowing fines)
- Foreign property taxes
đź’° SALT Deduction Cap (2025 Update)
Under the One Big Beautiful Bill Act (OBBBA):
- The total deduction for state and local taxes (SALT) is now capped at:
- $40,000 for most filers
- $20,000 if married filing separately
This cap includes:
- Real estate taxes
- State income or sales taxes
- Personal property taxes
🧾 SALT Deduction Cap (2018–2024)
- $10,000 cap for:
- Single filers
- Head of Household
- Married Filing Jointly
- $5,000 cap for:
- Married Filing Separately
This cap applied to the combined total of:
- State and local income taxes or sales taxes (you could choose one)
- Real estate (property) taxes
- Personal property taxes
🧾 Claiming the Deduction
To deduct real estate taxes:
- You must itemize using Schedule A of Form 1040
- Only taxes actually paid to the taxing authority (e.g., via escrow) are deductible