Are Property Taxes Deductible?

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Typical real estate property taxes are deductible, as of 2014. Amounts paid for local and state property taxes can be included on itemized federal tax returns. The deduction is for the actual payment to the taxing authority, not the amounts paid in to escrow.

To claim the real estate property tax deduction, a person must own the property. A deduction cannot be claimed for taxes paid on behalf of another property owner. Local benefit taxes paid for property improvements are not tax-deductible. Annual taxes paid on personal property can also be deducted, such as taxes paid for a boat or car.