what is the property tax deduction 
state and local property taxes are generally eligible to be deducted from the property owner s federal income taxes deductible real estate taxes include any state local or foreign taxes that are levied for the general public welfare they do not include taxes charged for home renovations or for services like trash collection 1as noted below the tax cuts and jobs act tcja capped the property tax deduction along with other state and local taxes starting with 2018 taxes the law capped the deduction for state and local taxes including property taxes at 10 000 5 000 if married filing separately previously there was no limit on the deduction 2understanding the property tax deductionthe owner of a property must pay taxes assessed annually by a state and or local government on the value of the property a property owner can claim a tax deduction on some or all of the property taxes paid if they use the property for personal use and itemize deductions on their federal tax return 1the real estate taxes that can be deducted include taxes paid at closing when buying or selling a home and taxes paid to a county or town s tax assessor on the assessed value of the real property 3 real property according to the internal revenue service irs may include a taxpayer s main home vacation home land or foreign property 5special considerationstaxes paid on rental or commercial property and on property not owned by the taxpayer can not be deducted 4 in addition a homebuyer who pays the seller s delinquent taxes from an earlier year at the time the sale was closed cannot deduct these tax payments on their tax return this delinquent tax payment is instead treated as part of the cost of buying the home 3also a property owner s tax bill includes miscellaneous items that are not allowed to be deducted for tax purposes some of these items include payments for improvements made to a local residential area such as sidewalks and fees for service delivery such as trash collection 1 to understand what portion of a tax bill qualifies for the deduction refer to form 1098 which is reported by the bank or lender to the irs and sent to the property owner 6