Tax deduction benefits provided under rental property can be a boon to landlords. There are a host of benefits that this scheme provides. These benefits can be obtained via a number of heads like payment needed for cancelling a lease, rent amount, expenses incurred by the renter etc.



Here is a list of some of the most common deductible expenses:

1. Interest: Payments towards the mortgage interest, payments towards the loans for improving or acquiring rental property as well as interest accumulated on credit card payments all constitute deductible interest. Very often the credit cards are procured in order to buy services or goods towards the rental. For most home owners who have rented their property it is this interest which constitutes the largest portion of deductible expense.

2. Depreciation: Very often you may lose out on the property value because of depreciation. However now you can reclaim the rental property costs via depreciation. Such benefits can be provided from the second year onwards. As a landlord you can claim all depreciation costs over as many as 27 and a half years!

3. Repairing: Things like floor tiling, fixing leaks in the house, repainting jobs, the replacement of windows which have been broken, plastering as well as other expenses constitute the largest portion of repairs. You can avail benefits of deductible expenses in the same year in which you would have incurred these expenses. Thus, other than capital improvement expenses you can avail deductible benefits with reasonable, necessary and ordinary forms of expenses.

4. Travel expenses: There maybe times when you need to travel to your rented property either because you need to discuss something with the tenant or for repairs. In such cases travel expenses incurred can be claimed under the tax deduction scheme of rental property. As far as repairs go, you can also claim for expenses incurred while traveling to electrical or fault fixing organizations or plumbing companies etc. If you need to fly to another city you can even claim your airfare expenses and even hotel stay expenses to avail tax deduction. If you are smart enough you might just want to use this facility to combine a business trip with some leisure activities!

5. Home office: If you have set aside a portion of your house for rental business activities, you can claim these expenses towards the home office from your taxable incomes.

6. Losses: You may have suffered major losses due to floods or fire breakouts. In such cases you can claim a tax deduction either on the basis of the total loss or part of the loss. The amount of deduction provided will also depend on insurance amount being claimed by you.

7. Insurance: If you are paying a premium towards the insurance on your rented property you can deduct the amount under this benefit too. Things like theft, fire, flood insurance as well as insurance for landlord liability are covered under the scheme.

8. Services: These include diverse fees that get paid to companies for property management, attorneys, investment advisors of real estate, accountants, as well as other professionals as long as their services are towards rental activity purposes.

There are certain non deductible expenses too such as modification expenses like addition of new rooms in the house, vacancy resulting in loss of income, obtaining new tools or appliances, building new roofs or providing fencing in the house etc.