Are Property Taxes Deductible in California?
By Eli Fletcher, Fletcher Real Estate Team
Taxes can feel overwhelming, but knowing how to navigate deductions can make a big difference. One of the most common questions homeowners ask is: Are property taxes deductible in California? The short answer? Yes—but with some important limitations. Let’s break it all down so you can make informed decisions when tax season rolls around.
Understanding Property Tax Deductions
What is a Property Tax Deduction?
A property tax deduction allows homeowners to reduce their taxable income by the amount they pay in state and local property taxes. This means you can potentially lower your overall tax bill, but only if you qualify under certain conditions.
Federal Limits on Property Tax Deductions
As of 2024, the maximum deduction for state and local taxes (SALT), including property taxes, is capped at $10,000 for single filers and married couples filing jointly. If you’re married and filing separately, the cap is $5,000 per person.
This cap was introduced under the Tax Cuts and Jobs Act of 2017, significantly limiting deductions for homeowners in high-tax states like California.
Should You Take the Standard or Itemized Deduction?
Standard Deduction vs. Itemized Deduction
To deduct property taxes, you must itemize your deductions instead of taking the standard deduction. The 2025 standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly.
If your total itemized deductions—including property taxes, mortgage interest, and other eligible expenses—don’t exceed the standard deduction, it might not be worth itemizing.
When Does Itemizing Make Sense?
If you own property in Bay Area real estate, where home values and taxes are higher, your combined deductions may exceed the standard deduction threshold. Consulting with a tax professional can help determine if itemizing is beneficial for your specific situation.
Maximizing Your Property Tax Deductions
What Can You Deduct?
If you itemize, you can deduct:
Property taxes paid on your primary residence
Property taxes paid on a second home
Property taxes on land you own
What Can’t You Deduct?
Certain charges included in your property tax bill aren’t deductible, such as:
Assessments for home improvements (e.g., sidewalks, sewers)
Service fees (garbage collection, water service)
Key Takeaways for California Homeowners
Yes, property taxes are deductible, but the deduction is capped at $10,000.
You must itemize deductions to claim property taxes—taking the standard deduction might be better for some homeowners.
Higher property taxes in cities like San Francisco and Oakland may make itemizing worthwhile.
Need Real Estate Advice?
If you’re looking to buy or sell a home, working with one of the best bay area real estate agents ensures you get expert guidance. Top producing East Bay Realtor, Eli Fletcher, and the Fletcher Real Estate Team are here to help you make informed homeownership decisions!
Whether you’re navigating tax deductions or searching for your dream home, we’re here for you. Reach out to your top producing East Bay Real Estate Agent today!
