Each country has its own tax regulations that govern vacation rental properties. Deductions will always vary depending on the country, so be sure to investigate your country’s tax code long before you declare your annual rental income.
Maintenance, repairs and cleaning
Even the luckiest property owners should expect to have some repair and maintenance costs. So whether you need a new roof or have to fix a leaky sink, you should plan on deducting any professional service fees and the cost of supplies. Bear in mind that rental property cleaning services are also considered a deductible expense.
Gorgeous beach houses and scenic mountain retreats are hot rental properties, but the cost to insure them against hurricanes, mudslides and other natural disasters can be hefty. Add in some liability insurance to protect your assets in case of an accident, and well, it’s really no wonder your insurance agent sends you a card during the holidays! It’s up to you whether you want to keep the card, but be sure to save the insurance bill as proof of a valid deduction.
Utility bills and tax
The cost of providing electricity, Internet, water and other essential utilities for your rental can easily amount to several hundred dollars each month. Add state and local taxes into the mix, and these potential deductions can be worth thousands of dollars each year.
Linen and supplies
It might seem strange, but you can even deduct the amount spent on towels, sheets and other furnishings that are a requirement of a rental property business. So be sure to keep all those receipts to cash in on later.
One of the most common expenses to deduct is that for depreciation of the property. It’s a capital expense, which you can begin to deduct as soon as your vacation rental is prepped and fit for leasing out to guests.
Thanks for reading the article! We hope you have greater understanding of the topic discussed above.
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