10 Vacation Rental Tax Deductions

If you use your vacation rental for less than 14 days or for 10 percent or less of the total annual rented days (whichever is greater), your vacation rental is classified by the IRS as a full-time rental business. This is called the 14-day rule. Full-time rental businesses are eligible for “ordinary and necessary” tax deductions related to business expenses, some of which may surprise you. Here are ten tax deductions all short-term and vacation rental operators should be taking advantage of:

1. Advertising Expenses

   If you are advertising your vacation rentals to attract guests, all advertising costs, including posting to a marketplace (like HomeAway or AirBnb) are tax deductible.

2. Maintenance Costs

   HOA Fees, Smoke detector batteries, cleaning, costs, etc. are all tax deductible.

3. Repairs 

   Broker air conditioners, plumbing costs, etc. are all tax deductible.

4. Property Management Fees

    Do you outsource your vacation rental management to a company? Deduct their fees.

5. Insurance 

   Insurance for a business purpose, such as your vacation rental, is tax deductible.

6. Utilities 

   Most vacation rentals have electricity, gas, and water expenses. Deduct them!

7. Travel Expenses 

   If you must travel to check on your vacation rentals, the travel cost is tax deductible.

8. Legal and Professional Expenses 

   If you work with a lawyer or accountant on your vacation rental, those fees are tax deductible.

9. Office Expenses 

   Do you run an office to manage your rentals? Those expenses, like office supplies, are tax deductible.

10. Mortgage Interest 

    If you take out a loan for your vacation rental, the interest is tax deductible. If you need a loan for your vacation rental, contact us.

Keep in mind that in order to take advantage of these deductions, all expenses must be tracked. If you need help with tracking, check out the Cozy Expense Tracking Tool. For more vacation rental tips, check out the "Vacation Rentals" section of our blog, and for more investor insights, check out our Resources Page.

Related: What to Look for in a Vacation Rental Insurance Policy, How to Find a Vacation Rental