The top tax deductions for landlords in 2026 include mortgage interest, property taxes, insurance, repairs, depreciation of the building over 27.5 years, 100% bonus depreciation on appliances and furniture, travel to the property at 72.5 cents per mile, and the 20% QBI deduction for rentals that qualify as a business. Rental income and expenses are reported on Schedule E, and the passive activity rules decide whether losses can offset other income. Here is the full list, with examples and the rules that trip landlords up.
Tax Deductions for Landlords at a Glance
| Deduction | Key rule for 2026 |
|---|---|
| Mortgage interest | Fully deductible on Schedule E; not limited like personal mortgage interest |
| Property taxes | Deductible on Schedule E and not subject to the personal SALT cap |
| Insurance | Landlord, liability, flood and mortgage insurance premiums |
| Repairs and maintenance | Deductible in the year paid; improvements must be depreciated |
| Depreciation | Residential buildings over 27.5 years; land is not depreciable |
| Bonus depreciation | 100% for qualifying property acquired after January 19, 2025, such as appliances, carpet and furniture |
| Travel | 72.5 cents per business mile, or actual costs |
| QBI deduction | Up to 20% of net rental income if the rental is a trade or business |
1. Mortgage Interest and Financing Costs
Interest is often the largest of the tax deductions for landlords. Interest on loans used to buy or improve rental property is deductible on Schedule E, without the $750,000 limit that applies to a personal residence. Points and loan fees on a rental loan are generally amortized over the life of the loan. See deductible mortgage interest.
2. Property Taxes
Real estate taxes on rental property are a business expense. Unlike property taxes on your home, they are not subject to the $40,400 SALT cap for 2026.
3. Repairs vs. Improvements
Repairs that keep a property in normal operating condition, such as fixing a leak, patching drywall or repainting between tenants, are deducted in the year paid. Improvements that make the property better, restore it or adapt it to a new use, such as a new roof or a kitchen remodel, are capitalized and depreciated. Two safe harbors help: the de minimis rule lets you expense items costing up to $2,500 each, and the small taxpayer safe harbor can allow expensing of certain building costs for smaller landlords.
4. Depreciation
- Residential rental buildings: 27.5 years, straight line, starting the month the property is placed in service.
- Appliances, carpet and furniture: 5- or 7-year property, eligible for 100% bonus depreciation.
- Land improvements such as fences, driveways and landscaping: 15-year property, also bonus-eligible.
- Cost segregation studies can reclassify parts of a building into shorter lives for larger early deductions.
Among all tax deductions for landlords, depreciation is the one that requires no cash outlay each year, but it reduces your basis and is recaptured when you sell. See depreciation recapture.
5. Other Operating Expenses
- Utilities you pay, trash and HOA dues.
- Property management fees and leasing commissions.
- Advertising, tenant screening and legal fees.
- Accounting and tax preparation for the rental.
- Supplies, tools and cleaning.
- A home office used regularly and exclusively to manage rentals, if it is your principal place of business for that activity.
6. Travel and Vehicle Costs
Driving to show a unit, meet a contractor or pick up supplies is deductible at 72.5 cents per mile in 2026, or actual vehicle costs. Keep a mileage log. See IRS mileage rates for 2026.
7. The QBI Deduction for Rentals
Rental income can qualify for the 20% QBI deduction if the activity is a trade or business. The IRS safe harbor generally requires separate books for each rental enterprise and at least 250 hours a year of rental services. See the QBI deduction for 2026.
Example: A Single-Family Rental
A landlord collects $30,000 of rent. Expenses are $9,000 of mortgage interest, $4,000 of property tax, $1,500 of insurance, $2,500 of repairs and $1,200 of mileage, plus $10,000 of depreciation on the building and $3,000 of bonus depreciation on a new refrigerator and washer. Net rental income is a loss of $1,200, which may be deductible against other income under the special $25,000 allowance described below.
Passive Loss Rules
- Rental losses are generally passive and can only offset passive income.
- If you actively participate, up to $25,000 of rental losses can offset other income, phasing out between $100,000 and $150,000 of modified AGI.
- Real estate professionals who materially participate can treat rental losses as non-passive.
- Short-term rentals with an average stay of seven days or less follow different rules and may be non-passive if you materially participate.
- Disallowed losses carry forward and are released when you sell the property.
See IRS passive activity rules.
Frequently Asked Questions
What can landlords deduct in 2026?
Mortgage interest, property taxes, insurance, repairs, depreciation, management fees, utilities, travel, legal and accounting fees, and other ordinary and necessary rental expenses.
Is the SALT cap a limit on rental property taxes?
No. Property taxes on rental property are deducted on Schedule E and are not subject to the personal SALT cap.
Can I deduct a new roof on my rental?
A new roof is generally an improvement depreciated over 27.5 years, unless a safe harbor applies.
Can rental losses offset my wages?
Up to $25,000 if you actively participate and your modified AGI is under $100,000, with a phase-out up to $150,000.
Final Thoughts
The best tax deductions for landlords come from good records. Separate repairs from improvements, track mileage, depreciate everything you can, and understand the passive loss rules before counting on a rental loss. Our landlord guide to rental income covers the income side.
Have questions about how this applies to your situation? Book a free consultation with Aric and get answers from a CPA.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
