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How Long to Keep Property Tax Receipts

by Fraser Sherman, studioD

There are two kinds of property taxes, which are typically billed together on one bill. One is based on the value of your house; the other is a special tax assessment to pay for street lights, sidewalks or other improvements in your area. When you're deciding how long you need to keep your paperwork, it makes a difference which type of tax your receipts are for.

Regular Tax

If your receipt is for regular property tax, you can deduct it if you itemize deductions on your income taxes. Hang on to these receipts at least three years, as the IRS can look back that far in a regular audit. The IRS can make it six years if they accuse you of under-reporting income by 25 percent or more. The Kiplinger website notes that if you're self-employed, the IRS may be more suspicious you're hiding income, so six years is safer.

Special Assessments

There's no tax deduction for special assessments. Instead, you add them to your "basis" -- roughly the purchase price -- when you figure your gain when you sell the home. If you bought for $200,000 and sold for $220,000, your gain is $20,000. If you also paid $5,000 in a special assessment, your gain is only $15,000. After you sell the house, the IRS can look back the usual three or six years, so you should hang on to the receipts until you're past that point.


If the IRS does challenge your write-offs, don't let go of any relevant receipts until you've resolved the case and the IRS notifies you it's closed. The same applies if you're disputing your property-tax bill at the local level. Hang on to the proof of payment until the disagreement is settled. If you haven't paid your income taxes, your IRS file remains open for that year indefinitely. Don't get rid of any relevant records for that year.


The IRS doesn't set any rules for how you keep records, so long as you can produce them when you need them. The agency recommends you keep them somewhere safe, organized by year. You could keep all your property-related bills for a given tax year in one folder or envelope, for example, or keep a copy of your receipt with the year's tax return. Electronic records are fine, but keep a backup of any important digital records so you're not caught short by a computer crash.

About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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