Tax Benefits Available Through Investing In Rental Property


Written by Sapphire of the Savvy Women Group


Much of the country recently has experienced a weakening in the local property market. A report commissioned by Hamptons shows, mortgage rates have fallen ‘to record lows’. If that is the case in your local area, now may be an excellent time to make the decision to invest in rental property.

Investing in property, provides exceptional tax benefits which can be a great deal when handled correctly. In this week’s SWG content we’ll take you through lots of potential tax deductions within this field, so by the end you will have a clear understanding on what to look out for and include.

If you already own a home, you may be quite familiar with many of the tax benefits offered by owning rental property. For example, by using a mortgage to purchase rental property you very well may be able to write off your interest payments on your taxes.

In addition, you can tap into tax benefits which you may not already be aware of. Many rental property owners find that they can deduct many of the expenses incurred in the maintenance of the property, such as:



Insurance as well as much more. We began looking at tax deductions in our previous blog, check it out here

If it’s your decision to hire a rental agent or a property manager, you will also have the benefit of writing off any fees paid for those services as well.


Our team of professionals at Savvy Estates has you covered with everything from investing, property training and finance, click here to find out more.



Depreciation deductions can also frequently be written off. In fact, depreciation is frequently one of the best tools available to owners of rental property. It provides you with the opportunity to essentially write off the largest expense associated with owning and operating rental property-the price for the property itself excluding the land.

It should be noted that depreciation does take place over a period. For residential rental property, the time schedule is: 27 ½ years and commercial property: depreciated over a period of 39 years. This means that if you paid £150,000 for a rental property (less the value of the land), the annual depreciation would be approximately £5,000.




You can also frequently include property improvements in your cost basis and depreciate them over time as well. Repairs can typically be deducted during the year in which they occurred.

Not sure whether something classifies as an improvement or repair?

-Keep in mind that improvements will add to the property’s value and prolong the life of the property while a repair is intended to keep the property in good condition.

REMEMBER: Landlords are not able to assign a value to their own labor and then deduct the cost of it.



Many landlords are also able to deduct the cost of travel, whether it is driving or flying. This may be especially handy if you’re a landlord who manages your own properties, and you aren’t within local distance.

In the event the travel is not local, you also have the advantage of being able to deduct such costs as hotel bills, airfare, and part of the costs of meals.



If you choose to operate a home office to manage your rental property, you may also be able to deduct specific expenses such as part of your homeowner’s insurance, utilities, and home mortgage interest.

To qualify for this tax benefit, the space assigned as your home office must serve as the primary place of business where you handle matters regarding the operation of your rental property.

In essence, the home office area must be used exclusively for business and not for any other purpose. You do not necessarily have to assign an entire room as your home office; however, if you can assign a part of the room that is definable as your home office.



Mastering how to handle your taxes can help you maximise your profits, after all as a business that is what you want. They can be complicated but when done correctly, you will find you are making the most money out of your property that you can. Choose our AQA Tax Rules course and become an expert today.

I am offering a FREE 45-minute ‘Discovery call’, let’s discuss your property business goals and objectives and I will take you through a Property Profits and Pension breakout strategy session. My aim is to empower women for success in business and I will show you that you don’t have to be superwoman to balance, life, career, and family.

Book your FREE 45 minute consultation with me, Sapphire Gray today.

Leave a Reply

Book Now