HERO, PACE programs tax deductible?

In recent years, programs have been developed that allow a homeowner to make energy improvements to their residence and pay for them through an assessment on their property tax bill. Clients have asked “if it shows up on my property tax bill it must be deductible, right?” Wrong! Improvements to your individual residence do not qualify as a property tax. However, the interest paid on the improvement usually qualifies as deductible mortgage interest. If you have questions in this area, we would be happy to help.