- Personal Finance
- Taxes
Homeownership comes with many costs. There’s your monthly mortgage payment, maintenance, homeowners' association dues, utilities, and, of course, property taxes.
While these are all unavoidable, some of them come with a small silver lining: a tax deduction. This simply means you can deduct their cost from your total taxable income, reducing your tax bill come April.
Property taxes are one of the major tax-deductible costs that come with owning a home, and the deduction just increased significantly in 2025. Here’s how this deduction works and how much you can write off this year.
Learn more: Tax credit vs. tax deduction — what’s the difference?
What are property taxes?
Property taxes are a type of levy paid by homeowners. They’re based on your property’s value and go toward local services such as schools, police forces, firefighters, hospitals, infrastructure, road upkeep, and more.
Each taxing jurisdiction — a school district, county, city, hospital district, or police department, for example — has a separate tax rate. This rate is then multiplied by your property’s assessed value and added up to get your total property tax bill for the year.
You’ll pay property taxes annually based on an updated assessment of your home’s value. Generally, the more your property grows in value, the more you’ll pay in taxes (though you can protest your home’s value if you think it’s incorrect).
Learn more: 8 tax deductions for homeowners
Is there a property tax deduction?
Property taxes are tax deductible. The Internal Revenue Service considers them a state and local tax (SALT), and they are deductible under the IRS' SALT deduction. You can deduct property taxes paid throughout the year, and if you recently bought your home, you’re eligible to deduct the real estate taxes you prepaid on closing day too.
SALT deductions have historically been limited to $10,000 per year, but since the One Big Beautiful Bill passed in 2025, they are now capped at $40,000 annually per household or $20,000 if you’re married and file your tax returns separately. This cap is for all state and local tax deductions (not just property taxes) and can include any sales and income taxes paid to your state and local governments across that tax year.
Note: Federal income taxes, HOA fees, Social Security taxes, and transfer taxes are not considered SALT deductions, per the IRS. Talk to a tax pro if you’re unsure what qualifies.
Learn more: Are closing costs tax deductible?
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Itemizing vs. taking the standard deduction
Taxpayers have the option to either take the standard deduction — a lump-sum amount that all taxpayers are allowed to write off every year — or itemize their returns and write off a number of smaller deductions all at once. (SALT deductions are an itemized deduction).
Before filing your returns, you’ll want to run the numbers to see whether the standard deduction or your itemized deductions total up to more savings. The right choice may vary by year.
Keep in mind that the value of the standard deduction also changes regularly. Here are the breakdowns for the tax years 2025 and 2026:
Remember, you will pay taxes for the 2025 tax year in April 2026 and taxes for the 2026 tax year in April 2027. If you’re not sure whether the standard deduction or itemized deductions are best for your situation, talk to a tax professional.
Read more: Standard vs. itemized deductions: Which filing approach is right for you?
Claiming the property tax deduction
The property tax deduction requires you to itemize your returns, which means filling out a Schedule A form when you file your taxes. This form lets you detail all the individual deductions you plan to take, along with their total cost.
Read more: How the mortgage interest deduction works
Property tax deduction FAQs
Are property taxes tax deductible?
Yes, property taxes are deductible. You can deduct up to $40,000 in state and local taxes (SALT) every year, as long as you itemize your tax returns. Itemizing is not always the best move, though. Make sure to run the numbers to calculate whether the standard deduction or your eligible itemized deductions will save you more.
How much of your property taxes are tax deductible?
You can deduct up to $40,000 in property taxes on your annual tax returns. If you’re married and file your returns separately, the limit drops to $20,000.
Can you deduct property taxes if you don’t itemize?
No, you can only deduct property taxes (or any other specific expense) if you itemize your tax returns. If you take the standard deduction, you are not eligible for the property tax deduction. The value of the standard deduction changes annually.
What home expenses are tax deductible?
As a homeowner, you can deduct mortgage interest, property taxes, mortgage discount points, and home office expenses.
How does the new $6000 tax deduction work?
Under the One Big Beautiful Bill Act passed in 2025, seniors 65 and up now have access to an extra $6,000 tax deduction. This can be taken in addition to the standard deduction or itemized deductions.
How do you claim property taxes on your taxes?
You’ll need to itemize your deductions to write off your property tax costs and detail those deductions on Schedule A of your tax return. You can deduct up to $40,000 in property taxes due to 2025’s new tax laws.
This article was edited by Laura Grace Tarpley.
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