Airbnb Tax Deductions: Top 2026 Write-offs
While there’s no shortage of vacation rental tax deductions available in 2026, finding your way through the thicket of confusing regulations and guidance can be tricky. In this timely article, we break down the most significant opportunities the typical short-term rental property owner can pursue to reduce tax liability. For our purposes here, we’ll assume you are operating a full-time vacation rental that’s available 365 days per year with no days allocated for personal use.
Quick Answer: What Can You Deduct on Your Vacation Rental?
Pretty much everything you spend to run the property, and more! The big ones include property management fees, mortgage interest, depreciation, property taxes, cleaning, utilities, insurance, and HOA fees. These eight categories typically account for 80-90% of total deductions.
Big 2026 change: Furniture and appliances now qualify for 100% bonus depreciation if acquired after January 19, 2025. Buy a $3,000 sofa? You’ll likely be able to deduct the whole thing immediately instead of spreading the deductions over 7 years.
Important: ⚠️ This is general info, not tax advice. Work with a CPA who understands short-term rentals.
The Big Eight STR Tax Deductions
Despite what other online resources might suggest, a handful of expense categories will likely account for the vast majority of your total vacation rental tax deductions. These include, in order of typical significance:
1. PM & OTA Booking Fees
This is the cut of guest revenue retained by your property manager and/or online booking platforms like Airbnb, VRBO, Booking.com, etc.
Reality check: You can only deduct these if your income includes this revenue. If you’re reporting income that’s already net of fees (after Airbnb takes their cut), you can’t deduct them again. That would be double-dipping.
Example: Guest pays $2,000 → Airbnb keeps $300 (15%) → You receive $1,700
If you report: $2,000 income → Deduct $300 in fees
If you report: $1,700 income → Don’t deduct fees (already accounted for)
Typical range: 15% (local property manager with direct bookings) to 30% (Airbnb + property manager combined)
2. Mortgage Interest
Not everyone can afford to buy real estate all cash, nor is it always the best strategy. If you carry a mortgage on your rental property, the interest you pay during the year is fully deductible.
Good news: The caps and limitations on mortgage interest deductions for owner-occupied properties ($750K limit) do NOT apply to investment properties. If you have a $1.5M mortgage on a vacation rental, you can typically deduct all the interest.
Note: Only the interest portion is deductible, not the principal payments. Your mortgage statement will break this down for you.
Typical deduction: $15,000-$50,000/year depending on loan size and interest rate.
3. Depreciation
This is the big one that many vacation rental owners overlook or don’t fully understand. When you own rental property, you can depreciate the building (not land) over 27.5 years (or 39 years for some short-term rentals). This creates a “paper loss” that reduces your taxable income without affecting your cash flow.
Example: $500K purchase price, $100K land value = $400K depreciable building Annual depreciation: $400K ÷ 27.5 = $14,545
2026 BONUS DEPRECIATION UPDATE:
As of January 19, 2025, furniture, appliances, and equipment qualify for 100% bonus depreciation—meaning you can generally deduct the full cost immediately instead of spreading it over 5-7 years.
Some common expenses that qualify:
- Furniture (beds, couches, tables, chairs)
- Appliances (fridges, dishwashers, washers, dryers)
- TVs, electronics
- Kitchen equipment (coffee makers, blenders, etc.)
- Lawn equipment
What doesn’t qualify (still 27.5 or 39-year depreciation):
- Building structure
- Permanent improvements (roof, HVAC, plumbing)
One example: Furnish a vacation rental in 2026 for $30,000:
- Old rules: Depreciate over 5-7 years = ~$4,500/year deduction
- New rules (post Jan-19-2025): $30,000 immediate deduction
At a 24% tax rate, that’s $7,200 in tax savings immediately versus only $1,080 in year one under the old rules. This is one reason furnished vacation rentals have some significant tax advantages right now.
For detailed depreciation calculations, use our rental property depreciation calculator or read our complete depreciation guide.
Typical total depreciation: $15,000-$40,000/year (building + furniture/equipment)
4. Property Taxes
Not to be confused with transient occupancy taxes (TOT) or hotel taxes, property taxes are paid to your county based on the assessed value of your property. Some counties charge different rates for short-term rentals versus long-term or owner-occupied properties. Make sure you understand your local classification and rates.
Typical deduction: $3,000-$15,000/year depending on location and property value
5. Cleaning Fees
Let’s face it, most vacation rental guests expect squeaky clean accommodations. Consistently meeting this high standard can be expensive. Make sure you’re deducting all relevant cleaning expenses.
Deductible cleaning costs:
- Professional cleaning between guests
- Deep cleaning services
- Carpet cleaning
- Window washing
- Supplies (cleaning products, trash bags, etc.)
Note: If you collect cleaning fees from guests, you are supposed to also report that revenue as income. Then deduct the actual cleaning expenses you pay.
Typical deduction: $3,000-$15,000/year depending on turnover rate and property size
6. Utilities
Vacation rental guests have zero financial incentive to conserve electricity or water. They may leave the AC running all day, take long showers, or keep the lights on while they’re out exploring the city. While there are some steps you can take to mitigate the costs, you should also expect that your utility bills will be higher than a comparable long-term rental.
Some deductible utilities, among others:
- Electricity
- Gas
- Water/sewer
- Trash
- Internet/WiFi
- Cable/streaming subscriptions
Typical deduction: $2,000-$10,000/year
7. Insurance
The cost of insuring a vacation rental can be significantly higher than regular homeowners insurance for the same property. This is, in part, due to the fact that short-term guests are unfamiliar with the property, which results in a higher risk of claims. Insurance companies charge accordingly.
Deductible insurance:
- Property insurance (fire, wind, flood)
- Liability insurance
- Umbrella policies
- Business interruption insurance
- Contents/personal property insurance
Don’t forget: Airbnb and VRBO provide some coverage, but you’ll likely want additional insurance. All of it is deductible.
Typical deduction: $1,000-$8,000/year
8. HOA Fees
If your rental is a condo or townhouse within a homeowners association, monthly or annual dues are usually fully deductible when the property is used for investment purposes.
Typical deduction: $1,200-$15,000/year
Other Important Deductions
Beyond the big eight tax deductions discussed above, don’t overlook these other types of deductible short-term rental expenses:
Repairs & maintenance:
- Plumbing repairs
- Electrical fixes
- HVAC maintenance
- Painting
- Appliance repairs
- Handyman services
Note: Repairs are immediately deductible. Major improvements (new roof, kitchen remodel) must be depreciated. The line between repair and improvement can be fuzzy—ask your CPA.
Supplies and consumables:
- Linens and towels
- Toilet paper, paper towels
- Soaps, shampoos
- Kitchen items (dishes, utensils, knives, etc.)
- Light bulbs
- Batteries for remotes
- Coffee, tea, welcome snacks
Landscaping & outdoor:
- Lawn service
- Pool/spa maintenance and chemicals
- Snow removal
- Gardening costs
Professional fees:
- CPA/tax preparation
- Attorney fees (related to rental business)
- Property management software
- Listing fees (if you pay to list on sites beyond Airbnb/VRBO)
Marketing & advertising:
- Professional photography
- Paid ads
- Website costs
- Business cards
Travel (with limitations):
- Trips to the property for maintenance, inspections, meeting vendors
- Mileage to/from the property
Caution: If you’re traveling to a vacation destination where your rental happens to be located, the IRS may scrutinize whether it’s truly a business trip. Keep detailed records and have a legitimate business purpose.
Office expenses:
- Office supplies
- Computer equipment (if used for business purposes)
- Software subscriptions (pricing tools, accounting, etc.)
Typical total for “other” category: $2,000-$15,000+/year
Capital Expenses: Depreciate, Don’t Deduct
Bigger ticket items are usually capital expenses that must be depreciated over time rather than deducted immediately.
Typically capitalized:
- Major appliances (without bonus depreciation election)
- Furniture sets
- Major renovations (kitchen or bathroom remodel)
- New roof
- HVAC replacement
- Flooring replacement
- Deck construction
Exception – Bonus Depreciation: For furniture, appliances, and equipment acquired after January 19, 2025, you can typically elect 100% bonus depreciation and deduct the full cost immediately. Talk to your CPA about whether to take this election.
Exception – De Minimis Safe Harbor: If you have an accounting policy in place and make the annual election, you may be able to immediately expense items under $2,500 per invoice line item instead of depreciating them. This is also worth discussing with your CPA.
4 Common Tax Deduction Mistakes
1. Not Separating Personal Use
If you use the property yourself for even a few days per year, you are only supposed to deduct expenses proportional to the number of rental days.
Example: Property rented 300 days and used personally for 20 days. You can typically deduct 300/320 = 93.75% of expenses.
2. Forgetting to Track Small Expenses
It’s easy to remember the $12,000 property tax bill. It’s hard to remember the $31 you spent at Walmart on paper towels, bath soap, and batteries.
Fix: Use a dedicated credit card for all rental expenses to keep your sanity. Review the statement monthly and categorize everything. Online software platforms can help enormously with this task.
3. Not Claiming Depreciation
When you sell, the IRS will charge depreciation recapture tax based on depreciation you “should have claimed” regardless of whether you actually took it or not. Always claim the full amount of allowed depreciation expenses!
4. Mixing Business and Personal Funds
Paying rental expenses from your personal checking account or having rental income deposited there makes tax prep much more challenging and invites IRS scrutiny. Consider opening separate bank accounts for each property or logical groupings of properties. And then make sure all income and expenses go through the correct account(s).
Keeping Good Records (Make Tax Time Easy)
Some ideas to consider:
- Separate bank account(s) for each rental or logical portfolios of rentals
- Dedicated credit card for rental expenses
- Accounting software – QuickBooks or even a detailed spreadsheet
- Save all receipts – take photos or have receipts emailed to you
- Track mileage – use an app like MileIQ or keep a manual log
- Calendar of days rented vs. personal use if you ever use the property yourself
Pro tip: Set aside an hour or so each month to categorize expenses and reconcile accounts. Don’t wait until tax time to figure out what that $347 charge at Home Depot was for 9 months ago.
What to keep:
- Bank and credit card statements
- Receipts for major purchases
- Contracts with property managers, cleaners, etc.
- Insurance policies
- Mortgage statements
- Utility bills
- HOA statements
- Booking reports from Airbnb/VRBO
How long: IRS recommends keeping records for 3 years from filing date, 7 years if you underreported income by >25%, or indefinitely for assets that you continue to hold.
FAQ
No. You can’t deduct the purchase price itself, but you can depreciate the building (not land) over 27.5 (or sometimes 39) years. For a $400,000 building, that’s about $14,545 per year. Use our depreciation calculator to get your exact amount.
You can only deduct expenses proportional to the rental days. If you rent it 80% of the year and use it personally 20%, you deduct 80% of expenses. It’s best practice to keep detailed records of rental vs. personal days to back up your math.
Yes, but with limits. This is more complicated terrain and something you should definitely consult a qualified CPA to discuss in more detail. You can sometimes deduct up to $5,000 in startup costs in your first year but it’s subject to a phase out if costs exceed a certain amount. Costs beyond that are typically amortized over a much longer period of time. Pre-rental renovations and furniture are usually added to your depreciable basis, not expensed immediately (unless they qualify for bonus depreciation).
No. You can’t pay yourself and deduct it. You can only deduct actual out-of-pocket expenses for materials and professional services you pay others to perform.
Meals while traveling for rental business are generally 50% deductible (same as any business travel). Keep receipts and document the business purpose. If you’re combining a vacation with a property visit, only the days with legitimate business activity count.
An LLC won’t materially change your tax situation—you still pay the same income tax whether you’re a sole proprietor or single-member LLC. But you may benefit from increased liability protection, among other advantages. See our guide on vacation rental LLCs for more on this complicated topic.
Related Resources:
- Rental Property Depreciation Calculator – Get your exact depreciation schedule
- Rental Property Depreciation Explained – Deep dive on how depreciation works
- Vacation Rental LLC Guide – Should you form an LLC?
⚠️ Disclaimer: This article provides general educational information about vacation rental tax deductions. It is not tax advice. Tax laws are complex and change frequently. Always consult a qualified CPA or tax professional familiar with short-term rental taxation before making tax-related decisions.
