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Are the new tax laws beneficial to landlords?

Are the new tax laws beneficial to landlords?

The simple answer is yes.  Keep in mind the ink is still drying on the massive tax overhaul recently enacted into law, and the way tax law works the full implications of the new tax codes will not be fully vetted out for some time.  However, it does appear the landlords of single family investment properties will not be taking a tax hit; and may in fact gain benefits.  Read more about the tax changes

With the new tax law two points regarding homeowners have been discussed a lot.  One is the cap of $10,000 for state taxes, including property taxes.  The second is a cap on mortgage interest payments.  These caps do not apply to rental properties, so you can still deduct your mortgage interest payment and property tax payments from the rental income received.

As it appears to be with the new tax laws the same benefits landlords received, depreciation of the property, deductions against the income for all expenses, [like mortgage interest, property taxes, insurance, repairs, and property management expenses] are still allowed to be used by landlords.  But in addition to this, landlord who set up a “pass through entity” for their rental will benefit from the lower rates.  Even landlords who do not set up a pass though will also see lower rates of taxable income.  Bottom line is that the new tax laws are a boost to landlords.



*please note the author is a licensed real estate agent and not a tax adviser, for tax advise please consult the appropriate professional.


If you would like more information about this or if you have any real estate or property management needs please contact us, we would be happy to speak with you!