Property Tax Deduction

• If you wish to claim your property taxes paid to your state and local governments on your taxes, you must itemize your deductions on Schedule A of your Form 1040. Provided that the property tax is based on the assessed value of your property and the government charges a uniform rate on all property within its jurisdiction, the full amount of the property tax is deductible.
  
  

What Does Not Count as a Property Tax Deduction?

• There are certain types of payments to a state or local governments that cannot be claimed as a property tax deduction. If you made a payment in exchange for services, that payment does not constitute property tax deduction. Taxes assessed on the sale of a house, such as a stamp or transfer tax, are not considered property taxes and are therefore not deductible.
  
  

Other Deductions for Homeowners

• The biggest deduction for homeowners is the mortgage interest deduction. This deduction allows you to deduct the part of your mortgage payment that is attributable to interest. This deduction is limited if your mortgage balance exceeds $1 million or the mortgage was taken out for a reason other than buying, building or improving your home. If you are required to pay mortgage interest premiums, you may deduct the amount of those payments as well. You must itemize your deductions on Schedule A of Form 1040 in order to claim these deductions.
  
  

Information for Non-Itemizers

• There are no homeowner deductions that are available without itemizing your taxes. However, if you qualify for the first-time homebuyer credit, you may claim that credit without itemizing your taxes. The rules for eligibility for the credit, which was offered at various times in 2008, 2009 and 2010, vary depending on the year in which you purchased your home. Additionally, there are certain residential energy credits available for taxpayers who do not itemize their taxes. These credits are available to taxpayers who made improvements to their homes that are intended to create energy savings.