Guest service fee deductions: Most short-term rental companies such as VRBO charge a guest service fee that is also deductible. These expenses may include mortgage and fire insurance fees for the year in which they are paid.Ħ. Rental property insurance deduction: As a rental property owner, you can deduct your insurance costs. Deductions for equipment, utilities and supplies may be deducted as a percentage of your home expenses.ĥ. The home office deduction: If you manage your rental properties from a home office, you may be able to deduct expenses related to that home office. Related: 10 Hosting Options Beyond AirbnbĤ. New Section 179 deductions for improvements: The new Section 179 Deduction now allows vacation property owners to legally deduct capital expenditures, such as roofs, HVAC units, security systems and fire alarms, as long as the vacation rental is used by customers on average for seven days or less. To determine if you are eligible for this major deduction, consult a tax advisor.ģ. A new pass-through deduction: Landlords who own a property as a business entity (Sole Proprietorship, S-Corp, C-Corp) may be able to deduct 20 percent of their rental property net income as a result of the new Tax Cuts and Jobs Act of 2017. This change applies to new properties placed into service from September 27, 2017, to December 31, 2022.Ģ. A new bonus depreciation deduction: Instead of letting property owners deduct only 50 percent of your furniture and equipment, the new tax law now allows owners to deduct 100 percent of expenses for personal property and land improvements used for business.
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