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Landlord Tax Explained
Click to learn about depreciation, deductible expenses, and loss carry-forward
AfA (Depreciation)
AfA allows landlords to deduct the building's wear and tear for tax purposes. This is a non-cash expense that reduces taxable income.
2% annually (after 1924)
Standard depreciation rate for buildings constructed after 1924. Full depreciation over 50 years.
2.5% annually (before 1925)
Higher depreciation rate for older buildings constructed before 1925. Full depreciation over 40 years.
Deductible Expenses
All expenses incurred to generate rental income are deductible:
- Mortgage interest (not principal)
- Property management and maintenance
- Insurance and property tax
- Travel costs to the property
- Tax advisor and legal fees
Loss Carry-Forward
If deductions exceed rental income, the resulting loss can offset other income or be carried forward to future years.
Note: This calculation is for guidance only. Please consult a tax advisor for binding tax advice.