Owning a rental property isn’t as simple as it seems. You don’t just spend on the property’s expenses then collect the rent. There are far more things you need to deal with like marketing your property, finding tenants, screening tenants, ensuring rent is paid on time and addressing any tenancy issues whilst overseeing maintenance of your property at the same time.

Managing a property investment is a job that requires so much time and effort from you. And because of this, most property owners hire managers to see to their operations as well as the dealings pertaining to their rental properties. Yes, it may be an added expense but it is also a tax deduction.

So what are the tax deductions on a rental property?

There are a lot of deductions for a rental property and they are divided into different categories depending on their type. Whilst there are deductions that can be taken at full cost, there are some that must be depreciated.

Deductions taken at full cost are the following:

  • Maintenance Expenses – includes repair of walls, appliances, windows and other fixtures
  • Administrative Expenses – includes advertising costs, credit checks and legal fees

Expenses that must be depreciated are:

  • Capital Expenses – these expenses are those that make up the value of the property as a whole. It also includes the expenses made to prolong its useful life.

If you are renting out only a part of your property, you may only write off the amount that equates to the percentage of your property that is being leased. On the other hand, if you spent on the maintenance and administration of the property alone then the expense is fully deductible.