Rental Property - Tax Deduction

Owing rental property helps the landlord in getting types of tax deductions. The income produced from the rental property (in short rental income) comes as revenue received from using residential property. Renting the residential property acts a highest investment done by the property owner in comparison to other investments.

Advancements in rent, expenses paid by tenants, unpaid security deposits, and lease cancellation, with some conditions, are also considered as revenue for the landlord.

Payments received through mortgaging the property, cleaning, insurance premiums, service, and from landscape maintenance, repairs are considered as tax deductible part of the income.

Certain other tax deductible parts in the rental property which usually get ignored by the landlord are

Expenses cost during the search of tenants, amount paid to accountants or lawyer for maintaining your property account, losses occurred due to depreciation of the property, and any loss caused due to depreciation of household items such as furniture, fridge, oven etc.

In some special cases, like for the time period when the rental property remains idle or vacant, the total revenues earned by landlord get reduced by loss rent. The only tax deductions part is the expenses incurred during this period. Modifying any item in the property, adding any room, or constructing any new roof in the house doesn't result to any tax deductions.

Ignorance of tax deductible parts by the land owner make him loose a good amount of money that he can obtain from his/her property. Tax benefits obtained through rental real estate is the highest as compare to any other investment. So, considering this point tips on some tax deductions on small rental residential property are given:


To any landlord biggest expense incurred on the property is the interest rate, and because of this it acts as a single largest tax deductible. Interest charged on the payment of loans and on the credit cards payments for the purchase of any item or service for the rental property act as tax deductible part on the income.


Depreciation of real estate acts as tax deductions on a part of the cost of the property over several years.


Expenses incurred due to ordinary, necessary, and reasonable repairing made on the rental property are considered fully deductible for the year they are claimed and made. Repainting, tiling, plastering, leak fixation, fixing gutters etc are all included in the tax deductible expenses.

Traveling cost

The expenses incurred because of traveling done to meet tenant to discuss about the repairs or anything else related to the rental property are considered as tax deductibles. Further, tax deductions differ on the type of traveling done depending on the location of property, like whether the property is located at local place or outside the place where the landlord is residing.

For local location, the expenses incurred for driving or taking any other medium to reach that place are considered as tax deductibles. For long distance location, expenses incurred to reach that place including traveling fare and hotels bills for staying there are considered as tax deductible amount.

Home Offices

Using part of home as rental property allows landlord to claim part of their home expenses as tax deductions. Details of home office deduction can be obtained from books on Home business tax deductions.

Hiring contractors or employees

Expenses caused because of hiring employee or any contractor or any contractor to perform some services including repairing etc act as tax deductible.


Costs associated with any loss occurred due to fires or floods are considered as tax deductible, under some conditions and circumstances. The amount paid on them depends on the insurance claim made on these losses.


The amount of premium paid on insurance applied on the rental property is considered as tax deductible.

Professional services

Fees given to tax attorneys, lawyers, and property managers can be claim as tax deductible amount. The fees are considered as operating expenses incurred on the rental property by the landlord.