Q&A: NY state has a mortgage tax on home mortgages. Is this tax deductible on federal and state taxes?

Posted on Sep 28, 2012 in HARP Refinance

Question by pagx1: NY state has a mortgage tax on home mortgages. Is this tax deductible on federal and state taxes?

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2 Comments

  1. It depends on what the tax is based on. Is it a sales tax based on what you paid for the home during the year? If so it would be included with your sales tax deduction if you chose that over the income tax deduction. If it is based on the value of your home then it is considered a property tax.

  2. No. Mortgage Taxes are not considered State and Local taxes – which are a tax deduction on Schedule A.

    Mortgage Taxes are really excise taxes on the mortgage. These taxes are not deductible. However, the cost of these taxes increase the basis, or purchase
    price of the property. So when you sell the property, these taxes would have increased your cost, and therefore reduced the gain you made on the sale.