Are condo dues and HOA assessments deductible on a rental?
Regular condominium dues are generally deductible. Publication 527 says that for a rented condominium you can deduct dues or assessments paid for maintenance of the common elements. A special assessment for a large project, such as a new roof for the whole building, may be an improvement instead, so look at what the money pays for.
Regular dues
Publication 527 covers condominiums and cooperatives in its chapter on special situations. For a condominium you rent out, it says you can deduct dues or assessments paid for maintenance of the common elements. Report them on Schedule E in the year paid, usually on Other, or on the line that matches what the dues cover if your association itemizes. Name the item so it is not lost in a catch-all total.
Special assessments
A special assessment is a one time charge for a project. Read the notice from the association. If it pays for repairs or maintenance, it fits with the dues above. If it pays to replace or upgrade something, such as a whole roof or a new elevator, it may be an improvement, which is depreciated rather than deducted at once. The repair or improvement rules apply the same way they do to your own invoices. Your preparer makes the final call.
| Charge from the association | Question to ask |
|---|---|
| Monthly dues | Do they pay for common element maintenance? |
| Special assessment for repairs | Is it keeping the property in working order? |
| Special assessment for a replacement | Does it better or restore the building? |
| Late fee or fine charged to you | Was it caused by the rental? Ask your preparer |
Example a made-up owner pays $350 a month in dues for 12 months, $4,200, and a $2,000 special assessment to replace the building's roof. The $4,200 is regular dues. The $2,000 goes in the improvements account for your preparer, not the dues line.
If the tenant pays the dues
Some leases make the tenant pay dues directly. If the tenant pays on your behalf, Topic 414 says expenses a tenant pays that you owe count as rental income, and you may then deduct them. Ask your preparer how to show it. If the tenant pays the association for their own use, such as a parking fee, there is no income to you.
Records for dues and assessments
- The association's notice for every special assessment, which says what the money pays for.
- The monthly dues statement, kept by property and unit.
- Any reserve or budget document that explains a big increase.
- Proof of payment, since late payments can add fees that are tracked on their own.
If an association bills one yearly amount, ask whether it itemizes insurance, utilities and reserves. Your books are easier to read when the pieces are on the lines they belong to, and the notice usually says. If it does not, one line is fine; name it clearly.
A related question is who pays when the unit is sold. At closing, dues are typically split by days, so the buyer and seller each carry their part, and your closing statement shows it. Keep the statement with the property's records.
Questions to bring to your tax preparer
- Is this special assessment a repair or an improvement for my building?
- Can I deduct dues for the months the unit was vacant but available for rent?
- How do I treat a fine the association charged because of a tenant?
- Where should the dues go if the association bundles insurance and utilities?
How DoorKeeping handles it
DoorKeeping reads a dues bill, codes it to the right property and expense account, and sends it for your approval. You can keep improvements in their own account. DoorKeeping gives no tax advice. Your tax preparer decides how a rule applies to you, and your state may add its own rules.
Sources
- IRS, Publication 527, Residential Rental Property, read Oct 30, 2026
- IRS, Instructions for Schedule E (Form 1040), 2025, read Oct 30, 2026
- IRS, Topic no. 414, Rental income and expenses, read Oct 30, 2026
Questions
- Are condo fees deductible on a rental?
- Publication 527 says dues or assessments paid for maintenance of the common elements of a rented condominium are deductible.
- Is a special assessment always deductible right away?
- No. If it pays for an improvement, it may be depreciated instead. Look at what it pays for.
- Do I deduct HOA dues for a home I live in?
- Not as a rental expense. Only the rented part of a property gives rental expenses.