What is a Property Tax Deduction?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 23 February 2020
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A property tax deduction is a tax deduction which is available to people who pay property tax. Depending on how the tax code in a nation is structured, people may need to itemize their deductions in order to claim the property tax deduction, or they may be able to claim it on a separate line in a tax return. Taxpayers can find specific information relevant to their country at a tax agency; many maintain websites with a great deal of information for taxpayers and a search for “property tax deduction” should pull up the relevant materials.

Property taxes are recognized as an expense of property ownership, and they are usually deductible as long as they are based on the value of the property and assessed evenly across a region. For example, property taxes on a home charged by an assessor are often deductible, as are taxes on a car which are charged as a percentage of value, as opposed to in the form of a flat fee. The property tax deduction may not apply to taxes charged on improvements.


Like other tax deductions, the property tax deduction limits overall liability for the taxpayer. This reduces the amount someone needs to pay in taxes. Taxpayers usually seek out as many deductions as possible so that their tax burden will be reduced. However, people should be careful about deductions because some tactics used to reduce liability may be of questionable legality and could be grounds for concern on the part of the tax authority.

Taxpayers who are unsure about whether or not they qualify for a property tax deduction and how to claim it can ask a tax agency or an accountant. An enrolled accountant is often the best choice, because these accounting professionals must keep up with the tax code in order to maintain their enrollment, and this means that they are familiar with the latest changes as well as being well versed in tax accounting. Such accountants can provide consultations to clients, and they can also prepare tax returns.

People who are eligible for property tax deductions should keep their tax records so that they can accurately report the amount paid in taxes during the year. It is also important to keep records as a form of verification that taxes have been paid, in case there is a dispute in the future. If tax records are lost, replacement copies can be requested from the authority which collects the property taxes.



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