| Yes, this is taxable and usually there are 2 ways of handling this. One method is to reduce your property taxes by this amount on Schedule A. But for taxpayers who do not itemize this method is not used.
The other method is a more commonly preferred approach used by Software Programs and CPA's where it is included on Page 1 of the 1040 under section "Other Income" not subject to Self-employement tax, describing the item as "Property tax rebate". | 
