Own a rental property in 2026? You may be able to deduct property taxes - here’s what the IRS says

Rental property tax deduction 2026: Collecting rent is not the only financial consideration involved in owning a rental property. For landlords, real estate taxes can be one of the expenses that may be deducted when calculating taxable rental income.

The rules remain relevant for landlords reporting rental income and expenses for the 2026 tax year, but the property-tax deduction itself is not a new rule created specifically for 2026.

Can Landlords Deduct Property Taxes on Rental Property in 2026

Yes. If you receive rental income from a dwelling, certain expenses may be deductible, including real estate taxes.


Mortgage interest, property taxes, operating expenses, depreciation and repairs are among the rental expenses that can be deducted, the IRS says. These costs may reduce the amount of taxable rental income.

Rental income and expenses are generally reported on Schedule E of Form 1040.

Property Tax Deduction for Rental Property Depends on Use

The amount that can be treated as a rental expense depends on how the property is used.

If a dwelling is used for both rental and personal purposes, the expenses generally have to be divided between the two uses. The IRS specifically notes that the rental portion of real estate taxes can be deducted as a rental expense.

For example, an owner who rents part of a home while using another part personally generally cannot treat the entire property-tax bill as a rental expense. The expenses must be allocated between rental and personal use.

When Can Landlords Deduct Rental Property Taxes

For taxpayers who use the cash method of accounting, rental expenses are generally deducted in the year they are paid. The IRS says most individuals use the cash method.

That makes documentation important. Landlords should maintain records of their rental income and expenses, including documents supporting property-tax payments.

The IRS says receipts, canceled checks and bills can serve as documentary evidence for expenses and recommends keeping records that support the amounts reported on a tax return.

How Are Property Taxes Reported on Schedule E

Rental real estate income and expenses are generally reported on Schedule E, Part I. The form is used to report income or loss from rental real estate and other specified activities.

The IRS's Publication 527 also explains that the rental portion of deductible real estate taxes can be reported as a rental expense on Schedule E when a property is partly rented and partly used personally.

Rental Property Tax Deductions Can Have Limits

A property-tax deduction does not necessarily mean every landlord can deduct every rental expense without limitation.

According to the IRS, if rental expenses exceed rental income, the resulting loss may be limited by the passive activity loss rules and at-risk rules. Personal use of a dwelling can also affect the amount of rental expenses that can be deducted.

Depending on how you use the property, and what rules of taxation apply, you may be able to deduct the expense.

Property Taxes in 2026: What Landlords Need to Know

Real estate taxes related to the rental use of a property can generally be deducted as a rental expense. However, the deduction can depend on whether the property is used only as a rental or partly for personal use, as well as other tax limitations.

The IRS recommends keeping good records of rental income and expenses so taxpayers can prepare their returns and support the amounts they report.