NEW YORK (MainStreet) — If you itemize you can deduct the municipal, school and county, and state and foreign real estate taxes - based on the assessed value of real property (land and “improvements”) - you paid during the year, whether you sent the check directly to your township, municipality or county or they were paid out of a mortgage escrow account.
You can deduct the taxes paid on all of the properties you own, including unimproved lots. There is no limit to the number of properties on which you can claim a deduction for real estate taxes on Schedule A. Property taxes paid on rental properties are deducted on Schedule E.
Charges for specific services, such as trash collection or water consumption, are not deductible as real estate tax. Neither are special assessments for capital improvements that will increase the value the property, like a new sidewalk. But you can deduct additional assessments to maintain public facilities, such as to repair existing sidewalks.
And also remember to deduct the portion of your annual maintenance fee assessment for a time-share condo, such as Disney or Marriott, that represents your share of the property’s real estate taxes. This amount should be identified on the annual billing statement.