Rental property under construction with monthly association fees and property taxes

Forum|Forum|11 months ago
April 14, 2025
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I have a home under construction that I plan to use as a short-term vacation rental. We own the property and pay monthly fees to an association, community water fees, property taxes, and mortgage interest. But the house is not a rental yet. I understand that mortgage interest can be included in the capital basis once the home is completed and we start renting it out. But does this apply to the various fees and property taxes we have paid? I would like to deduct some of those expenses this year if possible.

DianeW777

No deduction is allowed until the property is available for rent. If that doesn't take place until 2025, then you may be able to use 'Start-up' expenses next year.

Start-up Business Tax Tips

Cleaning & Maintenance

Those expenses incurred to maintain the rental property and its assets in the usable condition the property and/or asset was designed and intended for. Routine cleaning and maintenance expenses are only deductible if they are incurred while the property is classified as a rental. Cleaning and maintenance expenses incurred in the process of preparing the property for rent for the very first time are not deductible.