Tax-Deductible Rental Expenses - 2026 Guide

Deductible rental expenses depend on many factors. Generally, any expense that can be subtracted from your business income when filing your taxes is considered deductible. If you want to learn more about these types of expenses and reduce the amount of taxes you owe the government, be sure to read this article!

What are deductible rental expenses?

Deductible rental expenses are any out-of-pocket costs that you can subtract from your gross income to reduce your taxable income. These expenses must be supported by receipts and meet certain requirements, as explained below.

Requirements

Keep in mind that not all rental expenses are the same. For an expense to be deductible, you must ensure that:

• Make it measurable
• This is documented in the rent receipts.

Finally, it must be attributable to the rented property. If you have a mortgage, there are other factors to consider:

• It must be a mortgage that you used to purchase a home.
• The maintenance fees must be paid by the owner of the residence.

It is essential that all expenses be supported by receipts. As for the amount, the deduction limit for residential rent is 15% of your income, with a maximum limit of €9,040 per year.

What rental expenses can you deduct if you're a landlord?

These deductions apply to all real estate. If you own a rental property, you can deduct the following expenses:

1. Execution of the lease agreement

This is one of the most common expenses. It involves a legal representative drafting a lease agreement, which is signed by both parties (you as the landlord and the tenant).

2. Insurance

You can also deduct the premiums you pay for your property insurance. If it's a home, you can reduce your annual home insurance premiums.

3. Interest on loans or mortgages

These expenses related to maintaining your property can also be deducted from your gross income. It’s like a reduction in your income on your tax return.

Find out about the requirements for: reporting rental income from an apartment and claiming tax deductions for expenses related to a second home.

4. Municipal taxes

The most common ones are property tax and the garbage collection fee. We recommend that you keep your payment receipt; tax deductions for these taxes aren't common, but there may be some regional fees.

5. Common area expenses

Common area fees are charges intended to ensure that residents maintain the common areas in good condition. This applies to housing developments and residential complexes with shared facilities.

6. Repairs

The Income Tax Law stipulates that the maximum deductible amount for repairs made to a property you intend to rent out cannot exceed the income generated. However, this poses a problem if your apartment has not yet been rented out.

What expenses can you deduct if you're a renter?

If you're a tenant, you might be wondering if you can deduct your rent. The answer is yes. Here are some of the expenses you can stop paying:

1. Moving

Moving expenses may also be tax-deductible. This includes costs associated with transporting your belongings to your new home, as well as professional moving services you hire.

2. Home Insurance

If you're a renter, you can reduce the premiums you pay for home insurance policies you've taken out to protect your personal belongings. Depending on the coverage, these policies can protect your home and the contents inside it against various incidents, theft, and even natural disasters.

3. Directly paid supplies

The utilities (such as electricity, water, and gas) that you receive at your rental home may also be included on your tax return.

4. Justified renovations in a rental apartment

The costs associated with renovations you make to your rental apartment may be considered deductible expenses on your tax return. This is possible as long as you can demonstrate that these improvements are necessary. We recommend that you keep the documentation supporting these renovations.

5. Interest on loans requested

Interest on loans you take out to improve the rental property you’re living in may also be considered a deductible expense. As we mentioned earlier, keep a record of these payments and have the necessary documentation on hand to support them in the event of a tax audit.

How much can be deducted on a lease?

Generally speaking, the deduction amounts to approximately 10% of the rent paid for a primary residence. The maximum deduction is €455, provided that the combined taxable income and savings income is less than €25,009. It should be noted that the rent paid must not exceed 10% of the taxable income.

Are maintenance and repair expenses tax-deductible?

Expenses for maintenance and repairs are deductible when calculating the net return on real estate capital, including those mentioned by the taxpayer. However, there is a limitation: the maximum deductible amount may not exceed the total return on real estate capital for the tax period derived from the lease.

The deductibility of these expenses is contingent upon the generation of income from renting out the property. This means that there must be a correlation between the expenses incurred prior to the lease and future income.

Can I deduct utility bills for a rental property?

Expenses related to utilities for a rented home may be deducted on your tax return, provided certain conditions are met. These utilities include the cost of electricity, water, gas, and other essential services that ensure the property is habitable.

Tips

Now that you know which expenses are tax-deductible, we encourage you to make the most of these benefits. Below are some tips you won’t want to miss:

• Keep accurate records of all your rental expenses and payments. This includes receipts, invoices, and bank statements. These records will allow you to easily track your expenses and ensure that you’re claiming all the deductions you’re entitled to.
• Claim all eligible expenses. This includes property taxes, insurance, repairs, and maintenance costs.
• If you use your rental property for both personal and business purposes, allocate your expenses accordingly. In other words, if you use a room in your rental property as an office, deduct the portion of the expenses related to your home office.

Finally, take advantage of the depreciation deduction. This will allow you to deduct the cost of the property over a couple of years, which can result in significant tax savings.

Common mistakes to avoid

Deductions are one of the most important factors to consider when preparing your tax return. For this reason, it’s important to avoid common mistakes such as the following:

• Failing to organize your paperwork. This is one of the most common mistakes. Don’t let your receipts and invoices pile up. This mess can cause you to overlook important deductions and lead to additional stress.
• Overlooking certain deductions. You may overlook certain deductions due to a lack of knowledge or incorrect assumptions about what you can claim.

The last mistake we want to highlight—and one you should avoid—is missing the deadlines for filing your tax return. It’s very important to file on time so you can take advantage of the opportunities available to you and claim all the deductions you’re entitled to.

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Conclusion

Understanding deductible rental expenses is essential for maximizing your tax benefits. Taking advantage of the deductions that apply to your situation—whether you’re a landlord or a tenant—will make a significant difference on your tax return .Contact usand make sure you’re maximizing your deductions.