Tax Deductions and Credits You Can Claim on Your Property Taxes

12 June 2025

Picture this: You're sitting in your cozy home, sipping on your favorite cup of coffee, feeling accomplished that you own a piece of the world. But then, tax season knocks on your door like an unwanted guest. Property taxes can be a burden, no doubt, but what if I told you there are ways to lighten the load?

Yes, my friend, the tax code isn’t all doom and gloom—it holds little gold nuggets in the form of deductions and credits, waiting for you to claim them. Buckle up because we're about to dive deep into the world of tax breaks that could save you a pretty penny.

Understanding Property Tax Deductions and Credits

Before we roll up our sleeves and dig in, let's break it down simply:

- Deductions help reduce your taxable income, meaning you might owe less overall.
- Credits are even better—they're a dollar-for-dollar reduction in the actual tax you owe.

Now that we've got that straight, let's talk about the sweet tax benefits that can help you keep more cash in your pocket.

1. Mortgage Interest Deduction – The Homeowner’s Best Friend

If you're like most homeowners, you probably have a mortgage. And guess what? The interest you pay on that mortgage can be deducted from your taxable income.

Here’s the deal:

- You can deduct interest paid on up to $750,000 of mortgage debt (or $375,000 if you’re married filing separately).
- If your mortgage was taken out before December 15, 2017, you can deduct interest on up to $1 million in mortgage debt.

Why is this a game-changer? Because for many homeowners, mortgage interest makes up a significant chunk of their monthly payments. So, claiming this deduction can seriously reduce your tax bill.

2. Property Tax Deduction – The One You Shouldn’t Miss

This one’s a no-brainer. If you own property, you’re paying property taxes, right? Fortunately, the IRS lets you deduct up to $10,000 in state and local taxes (SALT) if you file jointly ($5,000 if married filing separately).

But here’s a catch: If you take the standard deduction, you won’t be able to claim this one. So, if you have hefty property tax bills, you might want to consider itemizing your deductions instead.

3. Home Office Deduction – For Those Who Work Where They Live

With more folks working from home than ever before, this deduction has become a lifesaver. If you run a business or work as a freelancer from home, you might be eligible for a home office deduction.

Here’s how it works:

- You must use a portion of your home exclusively for business.
- You can deduct a percentage of your mortgage interest, utilities, and property taxes based on the square footage of your office versus your home.

If your home office takes up 10% of your house, you can deduct 10% of your property taxes—sounds like a win, right?

4. Rental Property Tax Breaks – A Landlord’s Best-Kept Secret

If you’ve got rental properties, you’re in for even more tax benefits. Landlords can claim:

- Mortgage interest
- Property taxes
- Depreciation
- Repairs and maintenance
- Utilities (if paid by the owner)

Depreciation is where the real magic happens. The IRS lets landlords deduct the cost of their rental property over 27.5 years, helping to lower their tax bill every single year.

5. Energy-Efficient Home Credits – Go Green, Save Green

Thinking about making your home more energy-efficient? The government is all for it, and they’re even willing to reward you with tax credits.

Here’s what qualifies:

- Solar panels (Residential Clean Energy Credit – up to 30% of the cost)
- Energy-efficient windows, doors, and insulation
- HVAC upgrades

Not only do these upgrades help save the planet, but they also slash your electricity bill—double win!

6. Medical Home Improvement Deductions – When Health Meets Tax Savings

Did you know that if you make home modifications due to medical necessity, those expenses may be tax-deductible?

Qualifying improvements include:

- Installing ramps and grab bars
- Widening doorways for wheelchair access
- Modifying bathrooms for medical needs

However, only the amount exceeding 7.5% of your adjusted gross income (AGI) is deductible. So, if you had to make these changes, make sure you claim them on your taxes!

7. Moving Expense Deduction – Reserved for Military Members

For most people, moving expenses aren’t deductible anymore (thanks to tax law changes in 2018). However, active-duty military members moving due to military orders still get a special tax break.

If that applies to you, you can deduct:

- Moving truck expenses
- Storage costs
- Travel and lodging during the move

It’s a small perk, but every bit helps when relocating!

8. Mortgage Insurance Deduction – A Hidden Gem

If you paid private mortgage insurance (PMI), you might be able to deduct it—at least for now. Congress has been going back and forth on this one, but as of recent tax laws, PMI is still deductible if your income is below:

- $100,000 for joint filers (deduction phases out at $109,000)
- $50,000 for single filers (phases out at $54,500)

Check with a tax professional to make sure you're claiming this if eligible!

9. Casualty and Theft Loss Deduction – If Disaster Strikes

Nobody likes surprises—especially bad ones. If your home suffers significant damage from a natural disaster (hurricane, fire, earthquake, etc.), you might be able to claim a casualty loss deduction.

However, the damage must be:

- Due to a federally declared disaster
- Not reimbursed by insurance

If you live in an area prone to storms or wildfires, this deduction could be a financial lifesaver!

Final Thoughts – Don’t Leave Money on the Table

At the end of the day, owning a home is more than just a dream—it’s an investment. And just like any investment, you need to make sure you’re getting the most out of it.

Tax deductions and credits aren’t just government freebies; they’re there to help homeowners keep more of their hard-earned money. So, next tax season, don’t just blindly pay your property taxes—make sure you’re claiming every deduction and credit you qualify for.

Because if the government is handing out savings, why wouldn’t you grab them with both hands?