Tuesday, 30 January 2018

Will property taxes for rental property be deductible in 2018?

The property taxes for rental property can be deductible in 2018. Your typical rental expenses are basically electricity, heating, water, advertising, repairs and maintenance of the rental premises, interest portion of the mortgage, property taxes and legal fees if you have spent money to recover your rent from the current tenant or from the previous tenant. If you look at the pre launch projects in Bannerghatta road, you can be assured of proper demarcation of taxes and they are paid on time. All the expenses and maintenance amount are handled by the apartment or project authorities. Bangalore is coming up with just real estate projects that are quite transparent with their work

A little more into the discussed topic 

The taxpayers will be able to deduct their 2018 rental property taxes on their 2017 returns if they pay those tax bills before the end of the year—and only if the taxes were assessed before 2018, the Internal Revenue Service said in a news release.

 Bangalore has come up with a grand project – the Prestige Park Square which is an epitome of enviable amenities and apartments and it can be taken for rent as well if needed. Those who have already gone for rented ones can deduct the property tax for the rent. Prestige Park Square ensures some spacious and lavish units for all those who wish to live a luxurious life. Bannerghatta Main Road aids all the connectivity to various parts of Bangalore. Prestige Park Square, Bangalore has many schools, hospitals, IT Tech Park, commercial complexes and many other social infrastructures in the near proximity. So investing in projects of this sort can be profitable. 

 Property taxes for rental property are likely to be treated as a business expense against rental income. Thus, there would be an expense on a “schedule C” business, rather than a deduction against personal income. Real estate market would be affected to a certain extent. Income earned from leasing land, buildings, and that of furniture is subject to a non-final 15% withholding tax, levied on the gross rent. This tax is credited against the taxpayer’s total income tax liability.

Taxable income is computed on the basis of the actual rental value of the property or the government determined rental value, whichever poses to be higher. A standard deduction of 30% is granted for repairs and collection charges. Interest payments relating to loans used for the construction, acquisition, and repairs of the property are also entirely deductible.

 Property taxation is actually a very interesting sector. There is no comprehensive system of property taxation. Not only does it differ among the states, but it also varies between the municipalities within the states. For leased properties, property tax is levied on the annual rental value of the property. Hence, rental property taxes can be mostly deductible this year and this is applicable for most of the states. Bangalore is one of those cities who have been assuring this fact. The propping up of innumerable luxury projects are about to change the entire scenario.

1 comment:

  1. best prelaunch project from Prestige Group coming up at Anchepalya of Tumkur Road which is next to Nagasandra Metro Station.
    check project details- PRESTIGE JINDAL CITY