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Should I claim land tax in the year I paid it or in the year I was assessed?

It is important to note that the land tax amount is not deductible in the year you pay it. Instead, deductions must be taken in the respective income years to which the land tax liabilities related to. It’s crucial to understand that your liability for land tax is determined by the usage of the property within a given year, regardless of when the tax assessment is actually issued.

When you pay land tax for past years (known as paying “in arrears”), you can’t deduct this payment from your income for the year in which you make the payment. Instead, you can only claim a deduction for the land tax in the years that the tax was originally due for.

For an example – Imagine it’s 2024, and John receives a bill for land tax for the years 2022 and 2023 that he hasn’t paid yet. Even though John pays this bill in 2024, he can’t claim the deduction on his 2024 tax return. Instead, he should claim the deduction for the 2022 land tax on his 2022 tax return, and the deduction for the 2023 land tax on his 2023 tax return, because those are the years the tax relates to, even though he paid it later.