Short answer
If you itemize, generally yes. The IRS lets you deduct state and local real estate taxes, and the combined limit for state and local taxes (SALT) is now $40,000, or $20,000 if married filing separately, reduced for higher incomes but not below $10,000. Since New Hampshire has no tax on wages, property tax is often most of an NH homeowner's SALT deduction. You deduct what was actually paid that year. Check with a tax professional.
What is the SALT limit now?
According to IRS Publication 530 (2025) and Tax Topic 503, the overall limit on deducting state and local income, sales and property taxes rose to $40,000 ($20,000 if married filing separately). It's reduced if your modified adjusted gross income is over $500,000 ($250,000 if married filing separately), but not below $10,000 ($5,000 if married filing separately). You only benefit if you itemize instead of taking the standard deduction.
What about the taxes split at closing?
For federal tax purposes, the seller is treated as paying property taxes up to the day of sale, and you from the day of sale on, no matter who actually paid the bill. Your share is usually shown on the closing statement, and you can deduct it if you itemize. If you agree to pay a seller's back taxes from an earlier year, those aren't deductible; they're added to your cost basis instead. See your first NH tax bills after you buy.
I pay through escrow. What can I deduct?
Only the taxes your servicer actually paid from escrow to the town during the year, not everything you paid into escrow. Your tax bills and your servicer's year-end statement help you match them up. If you received a tax refund or a credit was applied, the deductible amount may be lower. See how escrow works with NH tax bills.
What doesn't count as a property tax?
- Transfer taxes, like New Hampshire's real estate transfer tax.
- Charges for services, such as water, sewer or trash fees.
- Homeowners or condo association fees.
- Assessments for local benefits that raise your property's value, like new sidewalks, except the part for maintenance, repairs or interest.
For mortgage interest, see the mortgage interest deduction.
A note on tax advice
Tom is a loan officer, not a tax adviser. These are the IRS's general rules; a tax professional can tell you what applies to your return. To estimate the tax itself, try the NH property tax calculator.
Sources
Checked November 2, 2026. Rules and dates change, so confirm current details before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.