When tax season arrives, many Georgia landlords overlook valuable deductions without ever realizing it, missing out on opportunities to improve their bottom line.
If you’re unsure which expenses you can claim, this post breaks down which deductions you may be entitled to as a Georgia landlord. We’ll highlight some commonly overlooked write-offs and share practical tips to help you maximize your investment’s ROI.
Georgia rental property tax deduction rules
Beyond standard federal deductions, Georgia offers unique state-level programs and incentives that can make a real difference for landlords with small portfolios.
Historic property tax incentives
If your rental property is currently listed or eligible to be listed on the National Register of Historic Places or the Georgia Register of Historic Places, you could qualify for two valuable state tax incentive programs:
- Preferential property tax assessment program
This program allows you to freeze your county property tax assessment at the pre-rehabilitation value for more than 8 years. So, if you invest in significant rehabilitation work on a qualifying historic rental property, your property tax bill won’t suddenly spike due to the improvements you’ve made.
Key points:
- Available for income-producing rental properties
- Individual owners can apply with no business size or job creation requirements
- The property must be officially listed as historic and undergo substantial rehabilitation (typically increasing its value by 50–100%)
- Rehabilitation work must meet state and federal historic standards
How it works: Once approved, your property tax assessment is frozen, potentially resulting in substantial long-term savings. You’ll need to apply digitally and make sure your renovation meets all preservation guidelines.
- State income tax credit program for rehabilitated historic property
This program offers a 25% Georgia income tax credit on qualifying rehabilitation expenses for historic rental properties, separate from any federal historic tax credits. For example, if you spend $100,000 restoring a qualifying property, you could receive a $25,000 state tax credit.
Key points:
- Maximum credit for rental properties ranges from $5 million to $10 million
- The property must be a certified historic structure and undergo substantial, qualifying rehabilitation
- All work must be certified by the Historic Preservation Division
Georgia low-income housing tax credit
Georgia also operates its own Low-Income Housing Tax Credit (LIHTC) program, which is separate from the federal LIHTC. This program rewards landlords who provide affordable rental housing to tenants with incomes between 20% and 80% of the Area Median Income.
How it works:
- Individual landlords can participate with no minimum property count or business size requirements
- You’ll receive state tax credits for offering qualified affordable housing
All of the above programs have strict requirements and application processes, so it’s wise to consult a professional. You can learn more about the application process and requirements of these programs through the Georgia Department of Community Affairs.
Other rental property tax deductions in Georgia
While Georgia offers some unique state incentives, don’t overlook the wide range of federal tax deductions available to landlords. These deductions can help you offset your rental income and keep more of your profits.
Here’s a practical checklist of the most common and valuable deductions you may be eligible for as a Georgia landlord:
Operating expenses
Repairs and maintenance: Costs for ordinary repairs like fixing a leaky faucet, patching drywall, or repainting are fully deductible in the year you pay for them.
Tip: Keep detailed records and receipts for all repairs, and be sure to distinguish between repairs (immediate deduction) and improvements (depreciated over time).
Property management fees: If you use a property manager or leasing agent, their fees are deductible as a business expense.
This includes not only monthly management fees but also leasing commissions, tenant placement fees, and even costs for eviction services if needed.
Utilities: If you pay for any utilities (water, electricity, gas, trash service) on behalf of your tenants, those costs are deductible.
Be sure to track which utilities you pay for each property, and consider whether including utilities in rent could provide a marketing advantage for your rental.
Financial expenses
Mortgage interest: The interest you pay on your rental property’s mortgage is one of the largest deductions available to landlords.
This can significantly reduce your taxable rental income, especially in the early years of your mortgage when interest makes up a larger portion of your payments.
Property taxes: State and local property taxes can be deducted from your rental income, subject to IRS limits.
Remember to include any special assessments or municipal fees related to the property, and keep your annual tax statements handy for tax time.
Insurance premiums: The cost of insuring your rental property, including landlord liability and hazard insurance, is fully deductible.
This also covers specialized policies such as flood, fire, or umbrella liability insurance, which can provide additional protection for your investment.
Depreciation and improvements
Depreciation: Each year, you can deduct a portion of your property’s value (excluding land) as a non-cash expense, even if your property is appreciating in the market. Residential rental properties are typically depreciated over 27.5 years.
Don’t forget to include the value of certain improvements and even appliances as part of your bonus depreciation schedule. A tax professional can help you maximize this deduction.
Capital improvements: Major upgrades (such as a new roof, HVAC system, or kitchen remodel) must be depreciated over several years rather than deducted all at once. Ordinary repairs, however, can be deducted in the year incurred.
Properly categorizing an expense as a repair or improvement can make a big difference in your current-year tax bill. When in doubt, consult a tax advisor.
Additional deductions
Legal and professional fees: Fees paid to attorneys, accountants, or tax professionals for rental-related advice or services are deductible.
This includes costs for preparing your rental property’s tax return, resolving tenant disputes, or seeking legal advice on lease agreements.
Advertising: Costs to market your rental property, such as online listings, print ads, or signage, are deductible as a business expense.
Track all advertising expenses, including digital marketing campaigns, social media ads, and even referral bonuses paid to existing tenants.
HOA and condo fees: If your rental property is part of a homeowners association or condo association, those fees are typically deductible.
Be sure to include special assessments for repairs or community improvements, as these can often be written off as well.
For a comprehensive list and more detailed explanations, see the IRS’s Tips on rental real estate income, deductions and recordkeeping.
Did you know?
Travel expenses like mileage to and from the property, or even airfare and lodging if your rental is out of town, can sometimes be deductible.
Always keep a mileage log or travel diary, and document the business purpose of each trip to stay compliant with IRS requirements.
Tips for managing your rental property taxes, income, and expenses
To help your rental property management operations run smoothly, keep meticulous records of all income and expenses related to your rental property. These records should include rent payments, maintenance costs, and property improvements.
A comprehensive management platform like Stessa makes this easy.
Stessa can import, categorize, and index all your expenses quickly and securely. Connect to banks, lenders, credit cards, and property managers to see all your data in one place:
- Bookkeeping: Traditional double-entry bookkeeping can be overkill for most rental property owners. Stessa keeps accounting easy so you can focus on growing your portfolio.
- Mobile app: Scan receipts to maximize tax deductions, categorize income and expenses on the go, and retrieve your data from virtually anywhere.
- Financial reporting: Stessa’s real-time dashboards and advanced reports help you own and manage your property like the pros.
With Stessa Cash Management, you also get a dedicated bank account for your rental business to simplify tracking your cash flow and expenses. This feature allows you to set up an unlimited number of accounts, requires no minimum balance, includes a cash-back debit card, and offers a competitive APY.
You also get a personalized tax package with our Tax Center, which includes an income statement, net cash flow report, and a ZIP file with receipts for backup.
Get started with Stessa for free and gain access to our comprehensive landlord tools and accounting resources.
