Maryland property taxes are deductible on your federal income tax return, but only if you itemize deductions instead of taking the standard deduction

You can deduct real property taxes you paid to Maryland on your federal tax return as part of your itemized deductions. Real property means land and buildings — your house, rental property, or commercial real estate. The deduction appears on Schedule A of Form 1040 and reduces your federal taxable income.

The catch is that you must choose to itemize deductions on your federal return. Most people take the standard deduction instead, which is a flat amount that changes each year based on your filing status. If the standard deduction is larger than your itemized deductions (including property taxes), you will pay less federal tax by taking the standard deduction. You cannot use both.

There is also a federal cap: the SALT deduction limit (State and Local Taxes) caps your total deduction for state and local income taxes, property taxes, and sales taxes combined at $10,000 per year. This limit has been in place since 2017 and is set to expire after 2025 unless Congress extends it.

Key Takeaways

  • Maryland property taxes are deductible on your federal return only if you itemize deductions on Schedule A of Form 1040.
  • The SALT deduction limit caps your combined deduction for state income tax, local taxes, and property taxes at $10,000 per year.
  • You must choose between itemizing (which includes property taxes) or taking the standard deduction — you cannot do both.
  • Maryland does not offer a separate state-level property tax deduction; the deduction is only available on your federal return.
  • Rental property taxes and commercial property taxes are also deductible, but they may be claimed differently depending on how you use the property.

How the SALT cap affects your Maryland property tax deduction

The $10,000 SALT limit means that if you pay $8,000 in Maryland property taxes and $3,000 in Maryland state income tax, you can only deduct $10,000 total on your federal return — not the full $11,000. The limit applies to the combined total of state income taxes, local income taxes, property taxes, and sales taxes you paid during the year.

This cap hits hardest in high-tax states and for people who own expensive homes. If your property taxes alone exceed $10,000, you cannot deduct the amount over the limit. You have to choose which taxes to count toward the $10,000 — many people prioritize property taxes because they tend to be larger, but the choice is yours.

The SALT cap is scheduled to expire on December 31, 2025, which means the limit may change or disappear depending on what Congress does. For now, plan your deduction assuming the $10,000 limit will stay in place.

When itemizing makes sense versus taking the standard deduction

Itemizing is worth doing only if your total itemized deductions exceed the standard deduction for your filing status. For 2024, the standard deduction is $14,600 for single filers, $21,900 for heads of household, and $29,200 for married filing jointly. These amounts increase slightly each year.

Add up all your potential itemized deductions: Maryland property taxes (up to the $10,000 SALT cap), mortgage interest, charitable donations, and medical expenses above 7.5% of your income. If that total is higher than your standard deduction, itemizing saves you money. If it is lower, take the standard deduction instead.

Many homeowners with mortgages and substantial property taxes do benefit from itemizing, especially in Maryland counties with higher tax rates. But you need to do the math for your specific situation — there is no one-size-fits-all answer.

Rental property and investment property taxes

If you own rental property in Maryland, the property taxes you pay are deductible, but not on Schedule A. Instead, you deduct them as a business expense on Schedule E (Supplemental Income and Loss) when you report your rental income. This is separate from the SALT cap limit.

The same applies to commercial property you own for business purposes. Taxes on investment real estate are business deductions, not personal itemized deductions, so they do not count toward the $10,000 SALT limit. You can deduct the full amount of property taxes on rental or commercial property, regardless of the cap.

If you own a second home in Maryland that you do not rent out, the property taxes on that home are treated as personal property taxes and subject to the $10,000 SALT cap, just like your primary residence.

What Maryland property taxes may have access to for the deduction

Only real property taxes — taxes on land and buildings — are deductible. This includes your primary home, a second home, vacant land you own, and any other real property in Maryland.

Personal property taxes do not may have access to. Personal property means things like vehicles, boats, or equipment. If Maryland charges you a personal property tax on your car or business equipment, that is not deductible on your federal return.

Special assessments for improvements (like a one-time charge for a new sewer line or road paving) are sometimes deductible and sometimes not, depending on whether they benefit your property long-term or are just maintenance. If you are unsure whether a specific charge qualifies, check your property tax bill or ask a tax professional.

How to report your Maryland property tax deduction

If you itemize deductions, you report your Maryland property taxes on Schedule A (Form 1040), which you file with your federal tax return. Line 5a of Schedule A is for state and local property taxes. You enter the amount you paid in Maryland during the tax year, up to the $10,000 SALT limit combined with any other state and local taxes.

You will need documentation of what you paid: your property tax bill, a receipt from the county assessor, or a statement from your mortgage servicer showing property taxes paid on your behalf. Keep these records for at least three years in case the IRS asks questions.

If you use tax software, it will walk you through the itemization questions and calculate whether itemizing or taking the standard deduction saves you more money. If you work with a tax professional, give them a copy of your Maryland property tax bill so they can include it in your return.

Maryland state-level property tax relief programs

Maryland does not offer a separate state income tax deduction for property taxes. However, Maryland does have property tax relief programs for certain groups: homeowners age 65 and older, disabled homeowners, and low-income homeowners may be may be able to access for a property tax credit or exemption through the Maryland Department of Assessments and Taxation.

These state programs reduce the amount of property tax you owe to Maryland itself — they are different from the federal deduction. If you receive a state property tax credit, you still report your full property tax payment on your federal return (up to the $10,000 SALT cap). The state credit just lowers what you owe Maryland.

Check the Maryland Department of Assessments and Taxation website or contact your county assessor to see whether you may have access to for any state-level relief.

Frequently Asked Questions

Can I deduct Maryland property taxes if I take the standard deduction?

No. The property tax deduction is only available if you itemize deductions on Schedule A. If you take the standard deduction, you cannot deduct property taxes. You have to choose one or the other based on which gives you the larger deduction.

Does the $10,000 SALT cap include Maryland income tax?

Yes. The $10,000 limit is the combined total of state income taxes, local income taxes, property taxes, and sales taxes. If you pay $6,000 in Maryland income tax and $5,000 in property taxes, your total SALT deduction is capped at $10,000, not $11,000.

What if I own property in Maryland and another state?

The $10,000 SALT cap applies to all state and local taxes you pay, regardless of which states. If you pay $7,000 in Maryland property taxes and $4,000 in Virginia property taxes, your total SALT deduction is capped at $10,000 combined.

Are property taxes on a rental property subject to the SALT cap?

No. Rental property taxes are deducted as a business expense on Schedule E, not as an itemized deduction on Schedule A, so they are not subject to the $10,000 SALT cap. You can deduct the full amount of property taxes on rental or investment property.

When is the SALT cap expiring?

The $10,000 SALT cap is currently set to expire on December 31, 2025. After that date, the limit may change or disappear depending on whether Congress extends it, modifies it, or lets it expire. For now, plan your deduction assuming the cap will stay in place.