The Top Ohio Rental Property Tax Deductions to Know

Many Ohio property owners are surprised to learn just how much their local tax laws impact their annual returns. For example, certain improvements and even travel expenses related to your rental can be deducted, and Ohio’s property tax structure offers unique opportunities to reduce your taxable income.

This post is your practical guide to understanding Ohio’s rental property tax deductions, without the jargon or guesswork.

Whether you’re a first-time landlord or a seasoned investor in the Buckeye State, you’ll find the details you need to make tax time less stressful and more rewarding.

Ohio rental property tax deduction rules

Before you start adding up receipts and filling out tax forms, it’s important to understand how Ohio’s rental property tax deduction rules actually work.

While Ohio doesn’t offer a long list of state-specific income tax deductions for landlords, there are several credits, valuation benefits, and city-level property tax abatements that can make a significant difference in your annual costs.

Below, we’ll walk through the most relevant state and local rules, highlight the deductions and credits that matter most, and help you identify opportunities that could improve your property’s cash flow.

1. Ohio Low-Income Housing Tax Credit (OLIHTC)

If you own or are considering investing in affordable housing, the Ohio Low-Income Housing Tax Credit (OLIHTC) is one of the state’s most valuable incentives. This credit offers state tax relief over a 10-year period for owners of qualifying affordable rental projects, with an annual cap of $100 million statewide.

To be eligible, your property must also qualify for the federal Low-Income Housing Tax Credit (LIHTC), and you must meet specific affordable housing requirements as outlined by the Ohio Housing Finance Agency OHFA.

OLIHTC is available for projects placed in service between July 1, 2023, and June 30, 2027.

Key eligibility points:

Must be paired with a federal LIHTC project.
Must meet affordable housing requirements.
For 4% LIHTC projects, a 42(m) Letter of Eligibility from OHFA is required.
The property must create new rental housing that otherwise wouldn’t exist.

2. Federally Subsidized Rental Property Valuation Benefit

If your property participates in federal affordable housing programs, you may benefit from a special valuation method for property taxes under Ohio law Ohio Revised Code Section 5715.01(A)(4). Instead of being taxed on market value, your property may be valued based on actual rent collected, which could result in a lower property tax bill.

Applicable to:

Section 42 (LIHTC) properties
Section 202 (Housing for the Elderly)
Section 811 (Supportive Housing for Persons with Disabilities)
Section 8 project-based properties

To qualify, you must file detailed operating income and expense information with your county auditor by March 1 of each required year, and the information must be audited by a qualified professional.

3. City-Specific Property Tax Abatement Programs

Many Ohio cities offer generous property tax abatement programs for landlords. These programs can dramatically reduce your property taxes, especially if you’re investing in new construction, major renovations, or affordable housing.

Major city programs include:

Columbus: Offers property tax abatements in designated Community Reinvestment Areas (CRAs) for including affordable housing units. The percentage of required affordable units and the value of the abatement depend on the area and project type. Some areas allow a fee-in-lieu option for affordable unit requirements. Learn more at the City of Columbus website.

Cleveland: Provides up to 100% abatement on enhanced property value for new construction or rehabilitation, with specific requirements for affordable housing and green building standards. The city also offers a unique Aging-in-Place abatement for qualifying properties. Details are available from the Cleveland Department of Community Development.

Cincinnati: Has a citywide abatement program for improvements to 1-4 unit structures and condos. Abatement terms and bonus incentives vary by neighborhood and project type. Visit the Cincinnati Residential Tax Abatement Program website for more information.

Akron & Toledo: Both cities offer 100% exemptions on the increased value from new construction or qualifying renovations for up to 15 years, provided certain requirements are met.

Many other Ohio cities—including Dayton, Youngstown, and Canton—offer similar programs focused on neighborhood revitalization. Be sure to check with your local city or economic development office for details to make sure you’re not missing out.

4. Short-Term Rental Taxes

If you operate a short‑term rental (Airbnb/VRBO, stays < 30 days), you must collect and remit the 5.75 % Ohio sales tax plus any county or city lodging/excise taxes (often 3 %–6 %). Some platforms remit these automatically; verify local requirements.

Other rental property tax deductions in Ohio

You can also take advantage of a wide range of federal tax deductions when filing your rental property income and expenses.

These deductions are reported on IRS Schedule E, which is used by landlords across the country (including Ohio) to track rental income and claim allowable expenses.

Advertising

Costs for online rental listings (Zillow, Apartments.com, Craigslist, etc.)
Printing and distributing flyers or yard signs for vacancies
Paid social media ads to attract tenants
Fees for property management companies to market your rental

Auto and travel

Mileage for trips to your rental property (e.g., for showings, inspections, repairs)
Parking fees and tolls incurred while managing your property
Travel expenses for out-of-town landlords visiting Ohio properties (note: only allowable if the primary purpose is rental-related)
Vehicle expenses if you use your car for rental business (choose between actual expenses or standard mileage rate)

Cleaning and maintenance

Professional cleaning services between tenants
Lawn care, snow removal, or landscaping for curb appeal or tenant safety
Gutter cleaning, pest control, or trash removal
Supplies like light bulbs, air filters, or paint for touch-ups

Commissions

Leasing commissions paid to real estate agents or property managers for finding tenants
Referral fees paid to tenant placement services

Insurance

Landlord property insurance premiums (hazard, fire, liability)
Flood insurance premiums (especially important in certain Ohio flood zones)
Umbrella liability policy premiums for rental properties

Legal and other professional fees

Attorney fees for drafting leases or handling evictions
Accounting or tax preparation fees related to your rental property
Fees paid to notaries or consultants for rental business matters

Management fees

Monthly or annual property management company fees
Charges for rent collection or maintenance coordination
Leasing fees for new tenant placements

Mortgage interest

Interest paid on loans secured by your rental property (primary deduction for most landlords)
Interest on loans used for property improvements or repairs

Other interest

Interest paid on credit cards or lines of credit used exclusively for rental property expenses
Interest on personal loans if proceeds were used for rental business

Repairs

Fixing leaky faucets, broken locks, or faulty appliances
Patching holes in walls or repairing damaged flooring
Replacing broken windows or doors
Emergency repairs after storm damage (common in Ohio winters)

Supplies

Small tools, hardware, or cleaning products used for the rental
Office supplies for rental business (folders, printer ink, postage)
Purchase of smoke detectors, batteries, or carbon monoxide alarms

Taxes

Real estate property taxes paid to your county or municipality
Special assessments for improvements (e.g., sidewalk repairs) if not capitalized
Local school district property taxes

Utilities

Water, sewer, and trash service if paid by the landlord
Gas and electricity for common areas or vacant units
Internet or cable if provided to tenants as part of the lease

Depreciation expense

Annual depreciation of your rental property building (but not the land)
Depreciation of major improvements (new roof, HVAC system, appliances) over their useful life
Use IRS Form 4562 to calculate your allowable depreciation

Other expenses

HOA or condo association fees
Bank fees for separate rental property accounts
Tenant screening and background check costs
Lease termination fees or tenant move-out incentives

Tips for managing your rental property taxes, income, and expenses

If you want to make managing your rental property finances easier, consider using a platform like Stessa, which is designed specifically for landlords.

Stessa makes it easy to track income and expenses, scan receipts, and generate detailed reports that simplify tax time:

Automatic transaction categorization: Stessa connects directly to your bank accounts and mortgage providers, automatically importing and categorizing transactions by property. This helps you capture more deductible expenses while creating a clean audit trail if the IRS has questions.
Receipt scanning on the go: The next time you make an emergency repair or buy supplies for your property, simply snap a photo of the receipt using Stessa’s mobile app. The receipt is automatically linked to the property and available at tax time.
Custom expense tracking: Unlike generic accounting software, Stessa is built specifically for rental property owners. Track Ohio property tax payments, insurance premiums, and HOA dues with customized categories that match your Schedule E.
Tax-time preparation: When April approaches, Stessa provides a detailed Tax Package with reports and documentation to help you file accurately, potentially saving hours of sorting through paperwork and spreadsheets.

Plus you get access to a suite of other tools to help you draft leases, screen tenants, collect rent online, and use real-time dashboards to manage smarter and faster.

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