Yes, property tax can be deductible for California homeowners, but mostly at the federal level and only if specific conditions are met, while California’s own income tax rules treat it differently.

Quick Scoop

Federal vs. California rules

  • For federal income tax , California property taxes on a primary home, second home, or some investment property are generally deductible as an itemized deduction on Schedule A, subject to the SALT cap of $10,000 total for all state and local taxes through at least 2025.
  • For California state income tax , property taxes on your personal residence are generally not a separate itemized deduction; instead, California offers targeted property tax relief programs rather than a broad deduction on the state return.

When property tax is deductible

On your federal return , California property tax is usually deductible if:

  1. You own the property
    • You are the legal owner (primary residence, second home, or certain investment property).
  1. You itemize deductions
    • You skip the standard deduction and itemize on Schedule A (Form 1040) , listing mortgage interest and property tax, among other items.
  1. You paid the tax in that tax year
    • Only taxes actually paid that year count; prepaid future-year taxes generally do not.

For rental or business property :

  • Property taxes are usually deducted as a business expense (for example, Schedule E for rentals) and are not subject to the $10,000 SALT cap in the same way personal itemized deductions are.

Key limits and gotchas

  • SALT cap :
    • The Tax Cuts and Jobs Act caps the combined deduction for state and local taxes (income, sales, and property) at $10,000 per return ($5,000 if married filing separately) for 2018–2025.
* In high-tax California, many homeowners hit this ceiling quickly, especially if they pay significant state income tax plus property tax.
  • Not everything on your bill is deductible :
    • Charges that are really fees or assessments , such as some improvement assessments (sidewalks, sewers, certain local improvements) or HOA dues, generally are not deductible as property tax.

Special California property tax breaks

California focuses more on relief programs than an income-tax deduction:

  • Homeowners’ Exemption
    • Reduces your home’s taxable value by about $7,000 if it is your primary residence, which saves roughly $70 per year in property tax until you move or change use.
  • Proposition 13 protections
    • Limits most annual increases in assessed value to around 2% per year until there is a sale or major improvement, helping keep long‑term property tax relatively predictable.
  • Property Tax Postponement (for some)
    • Certain seniors, disabled, or blind homeowners may qualify to delay paying property taxes on their primary residence under state programs.

These programs change how much tax you owe, not how much you can deduct on a return.

Forum-style take: what people usually ask

“Is property tax deductible in California, or did that all go away after the new tax law?”

Common practical points people trade in forums and tax threads:

  1. “Yes, but only if I itemize.”
    Many California homeowners with high mortgage interest and state income tax still itemize and include property tax—until the standard deduction or the SALT cap wipes out the benefit.
  1. “The SALT cap ruined it.”
    For higher‑income Californians, the SALT cap often means they pay big property and income taxes but can only deduct $10,000 total on their federal return.
  1. “Rentals still look better.”
    Owners of rentals often point out that property tax is fully deductible as an operating expense against rental income, outside the SALT cap.

If you’re planning your taxes

If you’re wondering whether property tax deductibility will actually save you money:

  1. Check whether your itemized deductions (mortgage interest + property tax + state income tax + charity, etc.) will exceed the standard deduction for your filing status.
  2. Estimate how close you are to the $10,000 SALT cap when you add up state income tax plus property tax.
  3. Remember that for California’s own tax , your relief usually comes from things like the Homeowners’ Exemption and Prop 13 protections, not from deducting the tax on your state return.

TL;DR:

  • Property tax in California can be deductible on your federal return if you own the property, itemize, and stay within the SALT cap; rentals/business property get broader deductibility.
  • For California state income tax , you generally do not get a simple itemized deduction for your home’s property tax, but you do get structural breaks like the Homeowners’ Exemption and Prop 13.

Information gathered from public forums or data available on the internet and portrayed here.