Updated January 2022
There are countless perks of owning a vacation home—the additional income, the option for an easy getaway, and the possible appreciation of your property over time. And, if you rent out your home for at least 14 days per year, you might also be eligible for the extra benefit of writing off some—or all—of your vacation rental expenses to reduce your taxes.
Even on the best of days, the short-term rental tax code can seem overwhelming and confusing. But, taking the time to determine what’s deductible can help you maximize every tax savings available to you. While many expenses related to your vacation home may seem small, they can certainly add up.
Not sure what’s deductible or not? You’re not alone. As a basic rule, tax deductible expenses must be:
For this upcoming tax season, consider these 10 tax deductible expenses for your vacation rental property. And don’t forget—we’re experts on vacation rentals, not tax law, so we always recommend that you consult a professional financial adviser at tax time.
If you travel away from home to conduct maintenance or repairs at your vacation rental, you may be able to deduct travel expenses such as accommodations, mileage, meals, and airfare. This could also include travel to attend seminars, classes, trade shows, or conventions that will benefit your vacation rental business.
As someone who manages their own vacation rental knows—cleaning can really suck your time and energy. If you decide to hire a professional housekeeping service to clean after every check-out, their fees and the cost of any cleaning supplies are considered tax deductible.
Vacation rental tip
When working with a vacation rental property management company, make sure they offer professional house cleaning as part of their services so you’re not stuck having to shoulder the responsibility of hiring and managing house cleaners.
Those fees you pay to your HOA or condo association do more than just cover snow removal, landscaping, and pool maintenance. You may be able to write off those monthly or annual dues to offset your tax liabilities.
If you work with a vacation rental property manager, such as Vacasa, to oversee marketing, booking, guest services, and maintenance of your property, their fees or commissions can be classified as tax deductions.
Bed sheets, lamps, dinnerware, and beds for all your guests. Completely furnishing and stocking (and restocking) your vacation rental can rack up a hefty bill when all is said and done. Luckily, those purchases count as possible deductions. Same goes for whatever you pay to maintain your amenities, such as pool and hot tub cleaning services and supplies.
Over time, things can break, crack, and need fixing. Any funds you pour into repairing or maintaining your rental property—like fixing leaky faucets or patching the roof—may be deductible at tax time.
Did you know?
Vacasa handles many common repairs and maintenance tasks, so you don’t have to.
You rely on your picturesque mountain cabin or beautiful beach cottage to attract guests and earn rental income. So, it’s crucial to protect it from any accidents or natural disasters with the right insurance policies. Though these insurance costs can be high, fortunately they’re counted as deductible vacation rental business expenses.
Utilities make up a large chunk of your monthly spend that keeps your vacation rental up and running. Luckily, these bills could be deducted for the months you rent out your property. This includes water, electricity, gas, internet, cable, and trash removal. Together, these could add up to some solid savings come tax time.
To reach the largest audience of travelers, you’re most likely posting your property to Airbnb, Vrbo, and other vacation home listing sites. Here’s what to look out for: Some vacation rental sites don’t charge you flat fees, but rather take a percentage from every booking as their commission. For example, Airbnb charges most property owners a 3 percent “host service fee,” which is taken off the top of what your guests pay for their stay. Keep track of every fee that is being paid back to these sites, as they can be considered deductible expenses on your taxes.
Did you know?
When you work with Vacasa, we’ll handle every element of marketing your vacation rental. Think professionally written descriptions, expert photography, and maintaining your listing on channel partner sites like Airbnb, Booking.com, and Vrbo.
While you can easily file your personal taxes, completing tax paperwork accurately and thoroughly for your vacation home is a whole new level of chaos. Unless you’re prepared to memorize the vacation rental tax codes front and back, save time (and your sanity) by working with a tax or accounting professional. Their fees may be deductible.
Vacation rental tax tip
Save copies of every bill, canceled check, and receipt pertaining to your vacation home. The key to saving big come tax season is keeping accurate and thorough records.
Want even more help running your vacation home as a lucrative investment and business? We’re here to assist with everything from marketing to pricing to answering guests' requests. Let’s talk.
Disclaimer: This publication is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual's legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your own attorney, CPA, and/or other advisor regarding your specific situation. The information provided here is for your use and convenience only. We have taken reasonable precautions in the preparation of this material and believe that the information presented in this material is accurate as of the date it was written. However, we will assume no responsibility for any errors or omissions. We specifically disclaim any liability resulting from the use or application of the information contained in this publication.
According to the IRS, maintenance on your vacation rental property is a deductible operating expense. However, make sure what you’re doing is actually maintenance versus a repair. The IRS counts both as deductions, but requires you to list them separately on your Schedule E. A simple rule of thumb: maintenance is done to prevent something from breaking, while a repair is completed after something has already broken.
Utilities make up a large financial responsibility when managing your vacation rental. The cost of providing internet, water, electricity, phone service, and other service essentials can add up to thousands of dollars a year. Fortunately, these costs are counted as deductible expenses come tax season (if you qualify for deductions based on the 14-day rule).
When you hire a property management company, such as Vacasa, to manage your vacation home, consistently market to guests, handle guests requests, clean, and maintain your property, their fees are considered tax deductible for eligible homeowners. Same goes for any other professional service you work with to maintain your property, including professional housekeepers, hot tub cleaning services, or electricians.
Yes, furniture—and any costs to repair existing furniture—can be a deductible expense come tax time. The same applies to amenities and appliances you purchase for your guests, such as a toaster, a TV, bed sheets, and towels. Larger items are usually entered as assets that depreciate. However, if the item costs less than $2,500, you can elect to write off the item as an expense, rather than an asset. This allows you to lower your income by a larger amount that year instead of depreciating the asset over several years.
Call 844-518-0967 to speak with a Homeowner Consultant, who can answer preliminary questions and see if we’d be a good fit for you.
If you'd like to move forward, we’ll put you in touch with our market expert in your neighborhood to explore the financial potential of your home, outline our management fee, and introduce your local team.
Vacasa offers property management and other real estate services directly through Vacasa LLC and through Vacasa LLC's licensed subsidiaries. Click here for more information about Vacasa's licensed real estate brokerage/property manager in your state. Vacasa’s licensed real estate brokerages/property managers include: Vacasa Alabama LLC; Vacasa Arizona LLC; Vacasa Colorado LLC (Mark Graham); Vacasa Delaware LLC, 302-541-8999; Vacasa Florida LLC; Vacasa Louisiana LLC, Dana MacCord, Principal Broker, ph 504.252.0155 (Licensed in LA); Vacasa Michigan LLC, 947-800-5979; Vacasa Missouri LLC, Susan Scanlon, Designated Broker; Vacasa Nevada LLC; Vacasa New Hampshire LLC, P.O. Box 283, Conway NH 03818, Dave Grant, Broker of Record; Vacasa New Mexico LLC, 503-345-9399; Vacasa New York LLC, 888-433-0068, Susan E. Scanlon, Real Estate Broker; Vacasa North Carolina LLC; Vacasa Pennsylvania LLC; Vacasa Real Estate Corporation, California DRE #02105811, Joseph Czapkowicz, California DRE #01380722; Vacation Palm Springs Real Estate, Inc., California DRE #01523013, Joseph Czapkowicz, California DRE #01380722; Vacasa Real Estate LLC (licensed in Colorado, Daned Kirkham); Vacasa Real Estate LLC (licensed in Idaho, Oregon, and Utah); Vacasa Real Estate LLC (licensed in Maine, Michael McNaboe, Designated Broker); Vacasa Real Estate LLC (licensed in Texas, Debra Brock, Designated Broker); Vacasa Real Estate LLC (licensed in Washington, Robert Brush, Designated Broker); Vacasa Seasonals Inc., California DRE #02160171, Lisa Renee Stevens, California DRE #01485234; Vacasa South Carolina LLC; Vacasa South Dakota LLC; Vacasa Tennessee LLC; Vacasa Vacation Rentals of Hawaii LLC, 3350 Lower Honoapiilani Road, Suite 600, Lahaina, HI 96761; Vacasa Vacation Rentals of Montana LLC, Terah M Young, Licensed Property Manager; Vacasa Virginia LLC; Vacasa Wisconsin LLC; Vacasa Wyoming LLC. In Canada, this advertisement is provided by Vacasa Canada ULC, CPBC lic. number 75826, 172 Asher Rd. V1X 3H6 Kelowna, BC.
The ability to rent out a vacation rental property is subject to local market regulations and restrictions.