Deductible Expenses for Vacation Rentals

To reduce your tax burden, it's essential to identify and deduct expenses related to your rental activity. The main deductible expenses include:

1. Interest and Financial Expenses
   If the property is financed through a mortgage, the interest paid is deductible. Other financial expenses related to the loan may also be deducted.

2. Taxes and Fees
   Taxes such as property tax (IBI), waste collection fees, and other local levies associated with the property are deductible in proportion to the time the home was rented.

3. Insurance Premiums
   The cost of insurance policies covering risks related to the property, such as fire, liability, or other damages, is deductible.

4. Maintenance and Repairs
   Expenses related to the maintenance and repair of the property that do not involve expansion or improvement are deductible. This includes minor repairs, painting, plumbing fixes, and similar expenses.

5. Utilities
   Expenses for services such as water, electricity, gas, internet, and other utilities are deductible, provided they are paid by the owner and correspond to the rental period.

6. Depreciation
   A portion of the property's value, as well as the furnishings inside it, can be deducted as depreciation. Typically, property depreciation is calculated based on the higher value between the purchase cost and the cadastral value, excluding land value.

7. Advertising and Marketing Expenses
   Investments in rental promotion, such as online ads, agency commissions, or professional photography, are deductible.

8. Cleaning and Maintenance Services
   If external services are hired for cleaning, laundry, or general upkeep between guest stays, these costs are deductible.

Additional Considerations

• Proportional Expense Allocation: Deductible expenses must be prorated based on the time the property was rented throughout the year.
• Proper Documentation: Keeping all invoices and receipts that support the deducted expenses is crucial in case of a tax audit.
• Professional Advice: Given the complexity and variations in tax regulations, seeking guidance from a tax advisor is recommended to ensure full compliance with tax obligations.