Housing Assistance: An Inventory of Fiscal Year 2010 Programs, Tax Expenditures, and Other Activities

U.S. Government Accountability Office

Property tax deduction

Administering Agency/Entity Internal Revenue Service
Short Description Allows taxpayers who itemize to deduct state and local property taxes paid on primary and secondary residences. To be deductible, property taxes must be based on an interest in real property, and must be levied for the general public welfare at a like rate for all properties in the jurisdiction. Real-estate-related charges for services, such as trash collection, are not deductible. For tax years 2008 and 2009, certain itemized deductions (such as property taxes) were limited if a taxpayer’s adjusted gross income (AGI) exceeded $159,950 ($79,975 if married filing separately) and $166,800 ($83,400 if married filing separately), respectively. Itemized deduction limits were not in effect for tax year 2010. Higher income taxpayers may also be subject to the Alternative Minimum Tax (AMT) which can limit the dollar value of certain itemized deductions, including the property tax deduction. Both the AGI limit and the AMT affect whether the amounts claimed result in a tax reduction and federal revenue losses.
Primary Purpose Assistance for homeowners
Type of Housing Supported Homeownership
Type of Assistance Tax exclusion, exemption, or deduction
Estimated Revenue Loss1 $15,120,000,000

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