This article is for educational purposes only and is not tax advice. Consult a licensed CPA or tax attorney before filing.
Short-term rental (STR) operators — Airbnb, Vrbo, direct booking — face a different cost structure than long-term landlords. The good news: many of those costs are ordinary and necessary business expenses deductible against STR income, subject to IRS rules, material participation tests, and local registration requirements.
If you finance STR acquisitions with DSCR or hard money bridge capital, accurate expense tracking also supports your refi underwriting when lenders stress NOI.
1. Platform, marketing, and guest-acquisition costs
Fees paid to Airbnb, Vrbo, booking engines, and payment processors are deductible business expenses. So are:
- Professional photography and listing setup
- Dynamic pricing software subscriptions
- Paid social ads driving direct bookings
- Website hosting for a direct-booking site
Keep monthly platform statements — they reconcile gross booking revenue to net deposits and document the deduction cleanly at year-end.
2. Cleaning, turnover, and guest supplies
STR economics live or die on turnover cost. Deductible items typically include:
- Professional cleaning between guests
- Laundry and linen services
- Toiletries, coffee, welcome baskets (reasonable and ordinary)
- Restocking consumables
If you self-clean, you generally cannot deduct your own labor — but supplies and outsourced turnover labor qualify when documented.
3. Repairs, maintenance, and STR-specific upkeep
Repairs (fixing what broke) are generally expensed in the year incurred. Examples:
- HVAC service calls
- Appliance replacement of like-kind items
- Plumbing and lock repairs
- Pool and hot tub maintenance
Distinguish repairs from improvements (capitalized and depreciated). A new roof is usually not a same-year repair write-off; patching a leak might be.
Investors scaling STR portfolios should separate CapEx reserves from operating deductions in their pro forma — lenders look at sustainable NOI, not one-year tax optimization.
4. Insurance, licenses, and local compliance
STR operators often carry higher insurance loads than long-term rentals. Potentially deductible costs:
- Landlord or STR-specific property insurance
- Liability and umbrella policies
- Business licenses and local STR registration fees
- Security monitoring and smart-lock subscriptions tied to guest access
Florida and other coastal markets may require wind mitigation and flood coverage — premiums are real hold costs even when deductible. Model them before you finance in Florida.
5. Mortgage interest, depreciation, and utilities
For properties rented more than 14 days per year (and personal use limits met), you may deduct:
- Mortgage interest on acquisition and improvement debt
- Property taxes
- Utilities you pay as the host (wifi, power, water, trash)
- Depreciation on the building (not land) over 27.5 years for residential rental property
Depreciation is a non-cash deduction that can shelter STR income — but it accumulates recapture on sale. Your CPA should map depreciation strategy to your hold period and exit (flip vs. long-term rental vs. 1031 exchange).
Bonus: home office and professional services
If you manage STRs as a business, you may deduct a home office (simplified or regular method), bookkeeping software, CPA fees, and legal fees for lease templates or local compliance — when properly substantiated.
STR tax traps investors miss
- Personal use days — too many owner nights can reclassify deductions
- Material participation — passive loss rules may limit write-offs against W-2 income
- Sales and tourist taxes — occupancy tax is not the same as income tax; remit locally
- Mixed-use properties — allocate expenses between personal and rental portions
Tie deductions to your financing story
Lenders underwriting STR DSCR loans want trailing revenue and expense history, not just projected Airbnb comp sets. Clean books make refi after a BRRRR bridge faster and cheaper.
Work with a CPA who understands STR — not only a general preparer. Then run your next acquisition numbers at getloanterms.com with realistic insurance, turnover, and platform fees baked in.
Deductions reward operators who treat STR as a business, not a hobby.
Worked example: STR expense allocation
Gulf Coast STR — $385,000 acquisition, $72,000 gross annual bookings:
| Expense category | Annual amount | Deductible? |
|---|---|---|
| Airbnb host fees (3%) | $2,160 | Yes |
| Cleaning / turnover | $14,400 | Yes |
| STR insurance premium | $3,600 | Yes |
| Utilities (host-paid) | $4,800 | Yes |
| Mortgage interest | $18,500 | Yes (if >14 rental days) |
| Depreciation (building) | ~$10,500 | Yes — non-cash |
| City STR registration | $350 | Yes |
| Total deductions | ~$54,350 |
Consult IRS Publication 527 on residential rental property and your CPA on material participation before claiming losses against W-2 income.
The 14-day test is a greater-of rule
Hosts often hear “14 days” as a single cutoff. IRC section 280A is stricter than that slogan. A dwelling is used as a residence if personal-use days exceed the greater of 14 days or 10% of the days rented at a fair rental. Personal-use days do not count as fair-rental days for that 10% test.
Publication 527 (2025) walks through the same comparison. In one example, 30 personal days failed because they beat both 14 days and 10% of the fair-rental days. In another, a guest room rented for 27 days had a 10% figure of only 3 days, so the 14-day branch was the one that mattered. Count nights before you claim a full set of rental expenses against a house you also use.
Family use counts. The statute treats a day as personal use if the unit is used by the taxpayer or by certain relatives, or if it is rented below a fair price. A “free weekend for my sister” is not a vacant night. Write the nights down. Your CPA cannot reconstruct them from a platform payout report.
Fewer than 15 rental days
Section 280A(g) is the other edge of the rule. If the unit is used as a residence and it is actually rented for fewer than 15 days in the year, rental income from those days is left out of gross income. Deductions that exist only because of the rental use are not allowed. A peak-week rental of your own home can fall into this bucket. A full-time investment STR usually does not, because it is rented far more than 14 days and you do not live there.
Do not mix the two rules in one sentence on your return. Either the short-rental exclusion applies, or you are reporting rental income and taking the expenses Publication 527 allows. Guessing wrong is how a clean listing becomes a notice.
Building, land, and appliances
Publication 527 says residential rental property placed in service uses a 27.5-year recovery period under the general depreciation system. An addition example in that publication is depreciated the same way. The publication’s contents list land under property you cannot depreciate. Split land from the building before anyone divides by 27.5.
The same publication’s MACRS table lists appliances, such as stoves and refrigerators, as 5-year property under the general depreciation system. A sofa is not a house. Track furnishings apart from the structure. Publication 527 also says the section 179 deduction recovers cost of certain qualifying property in the year it is placed in service, and it points that deduction to Publication 946. This page does not state a dollar cap. Ask the CPA whether a given item qualifies. Do not assume the whole furnishing package is a section 179 write-off.
Illustration: one year of building depreciation
Example only. Not a tax position.
| Line | Amount |
|---|---|
| Purchase price | $420,000 |
| Land allocated in the sketch | $80,000 |
| Building basis | $340,000 |
| Recovery period | 27.5 years |
| Straight-line year | $340,000 / 27.5 = $12,363.64 |
That $12,363.64 is a full year of straight-line math on the building only. Publication 527 applies a mid-month convention to residential rental property, so the first year and the last year are not automatically one twelfth of this figure times twelve. The land slice is not depreciated. If the assessor card shows a different land share, use the supportable split, not this $80,000. Recapture can apply when you sell. A flip exit and a long hold do not share the same depreciation plan.
The Gulf Coast table earlier on this page is a separate sketch. Do not add this $12,363.64 on top of that table’s depreciation line. They are two examples, not one property.
Repairs versus improvements
Publication 527’s contents separate repairs from improvements, and they name betterments, restorations, and adaptations as improvement topics. A service call that returns an HVAC unit to working order is the sort of item hosts expense. A new roof is the sort of item they capitalize. The safe harbor for routine maintenance and the de minimis safe harbor are in that publication. The dollar tests change, so use the current publication rather than a blog summary.
Lenders do not underwrite your tax return the way a CPA does. Jaken Finance Group DSCR loans look at rent versus the payment. Rates are 5.75%–10.5%. A purchase can go to 85%, cash-out to 80%, and a rate-and-term refinance to 85%, for a qualified borrower. The close is about 14 business days. A fix-and-flip or bridge that furnishes the house first is 8.99%–13.5% interest-only and closes in 7–10 business days. Clean categories still help. A draw request that calls a kitchen gut a “repair” slows both the CPA and the inspector.
Occupancy tax is not Schedule E
City and county occupancy taxes are remittances. They are not the federal income tax Publication 527 describes. Register where the property sits, collect what that locality requires, and file that return on its own calendar. Publication 527 does discuss rental income and expenses, including taxes that belong on the rental schedule. It does not set the tourist-tax rate for your city. Pay the local bill even in a month when the federal return will show a loss.
Platform statements help both filings. They show gross bookings, host fees, and payouts. Save them with the cleaning invoices and the insurance bill. When you refinance, the DSCR short-term rental review wants that history. The CPA wants the same folder. One set of books can serve both if you do not bury occupancy tax inside “miscellaneous.”
Finance your STR acquisition
| Phase | Product | Rate band |
|---|---|---|
| Acquire + furnish | Hard money / bridge | 8.99%–13.5% |
| Stabilized STR hold | DSCR STR program | 5.75%–10.5% |
Pre-qualify STR deal · DSCR loans for Airbnb · short-term rental laws hub · why STRs are booming
STR tax deductions — document for lender and CPA
Top deductions Airbnb hosts track (consult your CPA — not tax advice):
| Deduction | Lender relevance |
|---|---|
| Depreciation (building) | Shows on Schedule E |
| Furnishing / FF&E | Proves STR setup cost |
| Platform + cleaning fees | Operating expense |
| STR insurance rider | Required in PITIA if STR DSCR |
| Mileage / supplies | Minor vs. mortgage interest |
DSCR permanent at 5.75%–10.5% uses rent, not tax return — but clean books help STR-program exceptions. STR boom · STR laws · DSCR STR.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.