Are Real Estate Taxes Deductible in Westchester County?

If you live in Westchester County, whether in Scarsdale, Rye, Bronxville, White Plains, Yonkers, or New Rochelle, you already know that property taxes can be some of the highest in the nation. Many buyers and homeowners often ask: are these real estate taxes deductible? The answer is yes, but with important limitations.

Federal Deduction Rules

At the federal level, you may deduct state and local real estate taxes if you itemize your deductions. However, the SALT (State and Local Tax) deduction cap limits this to $10,000 per year ($5,000 if married filing separately). This means if you own a home in a community like Scarsdale, where annual property taxes can easily exceed $30,000, only a portion of those payments will actually be deductible. There is talk in Congress about raising that cap, which could especially benefit homeowners in high-tax counties like Westchester.

New York State Rules

New York State follows similar guidelines. Property taxes paid in a tax year, whether you paid them directly to the town of Greenburgh, via escrow in Yonkers, or at closing on a new condo in White Plains, are generally deductible. The key is that the taxes must have been actually paid during that calendar year.

For some residents, there’s also a little known benefit: the Real Property Tax Credit. If your household income is $18,000 or less, you may qualify for a refundable state credit up to $375. While this won’t apply to most homeowners in high-value markets like Rye or Bronxville, it can make a difference for seniors and lower-income households in places like Mount Vernon or Peekskill.

Other Deductible Expenses in a Real Estate Transaction

Since property tax deductions are capped, buyers and sellers across Westchester, Rockland, and Putnam Counties should also understand what else can be deductible:

• Mortgage Interest: Homeowners can deduct interest on mortgages for primary or secondary homes, subject to federal limits.

• Home Office Deduction: If you run your business from home, a portion of your housing costs may be deductible.

• Closing Costs: At purchase, only certain items, like prepaid property taxes and mortgage interest, are deductible. Most other fees add to your home’s cost basis.

The Bottom Line

Yes, real estate taxes are deductible in Westchester County, but most homeowners in places like Scarsdale, Rye, Bronxville, and White Plains will feel the pinch of the $10,000 SALT cap. Beyond property taxes, deductions for mortgage interest, home offices, and specific closing costs can provide additional relief.

If you’re planning to buy or sell in Westchester or the surrounding counties, having the right guidance makes all the difference. For personalized insight into the market, and how taxes play into your real estate goals, don’t hesitate to reach out to me directly at (646) 427-3035. I’d be happy to walk you through the details and help you make the most informed decision possible.