Utah Investment Property Tax Deductions: Fees and Occupancy

In several previous parts of this multi-part blog series, we’ve gone over the numerous examples of the various tax deductions and related tax benefits you often are eligible for when you own an investment property. Whether you’re renting it out to tenants or taking part in any other type of passive real estate investment, there are well over a dozen different tax benefits you may have access to, and taking advantage of them is vital for maximizing the true value of your investment.

At Fox Financial, we’re here to offer numerous investment property services in Utah, from basic purchasing (both individually and in groups) to various forms of passive real estate and much more. In today’s final entry into our series, we’ll go over a few more specific tax incentives or deductions to keep in mind if you’re investing in real estate.

investment property tax deductions

Licensing and Registration Fees

For virtually every locale where you might be acquiring a rental property, a hard and fast requirement will be licensing and registration fees. In many cases, these will also include a required inspection of the property.

However, as you may have guessed, any and all such fees for this process are tax-deductible at the end of the year. There may even be some areas that require a vacation rental license for AirBnB or other short-term rentals – these costs are also fully deductible, so you have nothing to worry about here.

Occupancy Tax

In addition, there are several states that assess occupancy tax on collected rental amounts, almost similar to sales tax. Also sometimes called a tourist tax, this usually isn’t too large an amount – and it’s generally tax-deductible. The precise amount will vary between not only your state, but even your county or local municipality.

Business Entity Pass-Through Deduction

While the details here are somewhat complex, recent changes from the TCJA made it possible for landlords to deduct up to 20% of rental business income from taxable business income. This is called a “pass-through” deduction, and it does come with restrictions – it’s mostly for business entities, and individual investors with income above a certain level may not qualify. Speak to our team to find out if this is a deduction you should be investigating.

Phones, Laptops and Other Tech

Finally, have you purchased a new phone, laptop, tablet or other tech you use for business purposes in the taxable year? In many cases, these costs can be deducted from taxable income, including if you use them for property rental or investment services. In addition, you can even deduct internet or phone bills that were used for business purposes.

For more on the tax deductions available to investment property owners, or to learn about any of our property investment services in Utah, speak to the staff at Fox Financial today.

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