Included in the $15.1 billion package of housing tax incentives in the recently enacted “Housing Assistance Tax of 2008” is a measure creating a new, temporary property tax deduction for non-itemizers (i.e., for taxpayers who claim the standard deduction rather than itemizing their deductions).  Here is a brief overview of this new provision:

• The provision creates a new standard deduction for state and local real property taxes paid by non-itemizers.  Since most homeowners who are paying on a mortgage have enough dudctions (e.g., mortgage interest and property taxes) to justify itemizing them on their return, this new provision chiefly benefits homeowners who have paid off their homes.
• The deduction is available only for one year 0 for tax years beginning in 2008.
• The amount of dudection is as much as $500 for single filers and $1,000 for joint filers.  Since this is a deduction and not a credit (i.e., a dollar-for-dollar reduction in tax liability), the actual tax benefit will not be substantial, for example on a maximum of $100 to a couple in the 10 percent tax bracket and $150 to a couple in the 15 percent bracket (and only $50 and $75, respectively, to singles in these brackets).
• The deduction isn’t limited to taxes paid on a principal residence.  Thus, for example, it may be claimed for state and local taxes paid on a vacation home as well as a principal residence.

Source: Ria Checkpoint