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Ways to Use Your Rental Property to Lower Your Tax Obligations

Do you earn income from a rental property? If so, there are many ways to minimize your tax obligations and keep more of the money you earn. Here are five ways you can do just that, whether you prepare your personal tax returns yourself or pay a Certified Public Accountant (CPA). These five ideas will help you minimize the amount of tax that you pay.

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1. Net Losses

If you prepare and file your own tax returns you may not be aware that you can deduct any net losses stemming from your rental property from your other sources of income. To calculate a loss you need to examine your property taxes, insurance costs, mortgage interest and management fees. An accountant or Certified Public Accountant (CPA) will be able to help.

2. Capital Cost Allowances

Any money you spend on furniture, fittings or fixtures for your rental units can be deducted when you prepare your tax returns. The limit of what you can claim is your gross rental income. However, you must not try to make it appear that you lost money on your rental property by subtracting capital cost allowances from your rental income. A good accountant will help you deduct all relevant costs when you file your taxes.

3. Auto Expenses

Renting out properties is hard work. You have to regularly visit your properties to ensure that the tenants are fulfilling their obligations and you may be called upon to oversee repairs or general maintenance work. The good news is that you can file deductions for these expenses. Your auto expenses can include not only the gas, but toll fees and parking charges as well. This is a great option if you rent out multiple properties or have to do a lot of travelling.

4. Repairs And Advertising

You likely know that any money you spent on repairs can also count as deductions, but did you know that advertising costs can also be claimed for? Making sure your property is seen in the right publications and on the right websites is essential to ensure that it rents out fast and for a good amount. Be sure to keep receipts for all the money you spent on advertising space both online and in print and use these to file deductions when you do your taxes.

5. Common Area Expenses

Do you own multiple units in the same condominium or apartment? If you live in one of the units and rent one or more of the other units out you may not realize that the common area expenses are deductible. This applies only to owners who live in one of the units as their primary residence.


If you’re a landlord and you’re looking to lower your tax bills, hopefully the advice in this guide has given you food for thought. An accountant or CPA will be able to put these ideas into practice. Hiring a CPA will put you at a huge advantage when you file your tax returns as they have the knowledge and experience to make judgment calls that save you money.

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