It’s one of those questions that comes up every spring, usually right around the time property tax bills land in the mailbox. People want to know: can I write this off?
The short answer is yes. Real estate taxes are deductible on your federal income tax return. But whether that deduction actually saves you money depends on a couple of things worth understanding.
Here’s how it works.
To deduct your property taxes, you have to itemize your deductions when you file. That means instead of taking the standard deduction, the flat amount the IRS gives everyone automatically, you add up your actual deductible expenses and use that number instead.
For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. That’s a high bar. If your total itemized deductions don’t exceed that amount, you’re better off taking the standard deduction, and your property taxes effectively don’t help you at all.
This is the part most people miss. They assume they’re getting a benefit from their property taxes every year when, in reality, they’re not itemizing at all.
Now, if you do itemize, your real estate taxes fall under what’s called the SALT deduction, which stands for State and Local Taxes. That category includes your property taxes, state income taxes, and local taxes combined. For 2025 and 2026, the combined cap on that deduction is $40,000. That’s up significantly from the $10,000 cap that had been in place since 2018.
For most Michigan homeowners, the $40,000 ceiling is more than enough room. Property taxes in areas like Ypsilanti, Belleville, and Ann Arbor are meaningful, but the combination of property taxes and state income taxes rarely pushes most households close to that limit.
The homeowners most likely to benefit from itemizing are those with higher property tax bills, significant mortgage interest, or other deductible expenses that push their total above the standard deduction threshold. If that’s your situation, the deduction is real and worth tracking.
One more thing worth knowing: the current rules are set through 2029. In 2030, the SALT cap is scheduled to drop back to $10,000 unless Congress acts before then. Tax laws change, and this one has changed more than once in recent years.
The bottom line is straightforward. Yes, your real estate taxes are deductible, but only if itemizing makes sense for your specific situation. The right person to answer that question is your CPA or tax advisor, who can look at your full picture and tell you exactly where you stand.
What I can tell you from the real estate side is that property taxes are a real cost of ownership, and understanding how they work helps you make better decisions, whether you’re holding, buying, or planning your next move.
If you have questions about how property taxes factor into the cost of homeownership in our market, I’m happy to walk through it with you.
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