Finance
Fact-checked

At WiseGEEK, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.

Learn more...

What is a Property Tax Deduction?

Mary McMahon
Mary McMahon
Mary McMahon
Mary McMahon

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.

The amount paid in property tax may be deductible when filing income tax based on a nation's tax code.
The amount paid in property tax may be deductible when filing income tax based on a nation's tax code.

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.

Online preparation services often ask questions to determine if people are eligible for the most common deductions, including those for property taxes.
Online preparation services often ask questions to determine if people are eligible for the most common deductions, including those for property taxes.

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.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Learn more...
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Learn more...

Discuss this Article

Post your comments
Login:
Forgot password?
Register:
    • The amount paid in property tax may be deductible when filing income tax based on a nation's tax code.
      By: emiliezhang
      The amount paid in property tax may be deductible when filing income tax based on a nation's tax code.
    • Online preparation services often ask questions to determine if people are eligible for the most common deductions, including those for property taxes.
      By: steheap
      Online preparation services often ask questions to determine if people are eligible for the most common deductions, including those for property taxes.