Are HOA Fees Tax Deductible? The Simple Answer

As a homeowner, you’ve probably wondered, “Are HOA fees tax-deductible?” Unfortunately, in most cases, the answer is no.

If you live in the home full time and don’t use any portion of it for business, the IRS generally treats HOA fees as a personal expense — meaning you can’t deduct them on your tax return.

However, if the property generates income, whether it’s through rent or a qualified home office, you might be able to write off some or all of those fees.

Here’s a breakdown of the 2025 rules, exceptions and how to report deductions you qualify for.

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What are HOA Fees?

HOAs (homeowners associations) across the country are responsible for managing and maintaining the common areas and setting the rules and guidelines of a planned community.

The HOA is also responsible for collecting fees from the community residents. It’s typically a monthly or annual fee that the homeowner’s association charges for services it provides to a community.

These fees may go toward:

• Maintenance and repairs

• Landscaping

• Upkeep of the community and common areas

• Insurance for common areas

• Safety and Security

• Special community events

When HOA Fees Are Tax-Deductible

So, are HOA fees tax-deductible?

“As is often the case in federal tax, the answer is — it depends,” said Karen Wallace, assistant professor in Adelphi University’s Willumstad School of Business.

She added that whether HOA fees qualify as tax-deductible depends on whether the owner’s use of the property is personal or business. Here’s a breakdown:

1. Rental Property Owners

For rental properties, there are two scenarios in which you can claim an HOA deduction from your taxes.

Here’s how it works:

Full Deduction

If you use the property as a rental property exclusively, you can typically deduct the full amount of your HOA fees.

As True Tamplin, a certified educator in personal finance and founder of Finance Strategists, explained, if you’re renting out a property and pay HOA fees for it, you can usually write these fees off as part of your rental business expenses.

“These fees are considered necessary for the maintenance and upkeep of the property, which generates income,” he said.

Partial Deduction

If you rent your home for part of the year and live in it the rest of the time, whether you receive a deduction depends on this IRS rule. There may be limitations to how much you can deduct if you rent a residence that you also use for yourself.

You are considered to use the property as a residence if you use it for personal purposes more than:

• 14 days during the tax year, or

• 10% of the total days you rent it to others at a fair rental price.

The deductible amount is based on the percentage of time the home was rented out.

For example, if you own a condo with $1,200 in annual HOA fees and rented it out for six months last year, you can deduct 50% ($600).

HOA fees can be deducted as an operating expense on Schedule E (Form 1040) when you file your taxes.

When trying to decipher “Are HOA fees tax-deductible for my rental?” review the IRS guidelines outlined in Publication 527 and consult a tax professional.

2. Home Office Deduction

If a part of your home is regularly and exclusively dedicated to your business (like a home office) and you’re also paying HOA fees, you might be able to deduct a slice of those fees.

“The catch is, it has to be directly related to the business part of your home,” said Tamplin.

If you qualify, however, home office expenses could be one of the most generous tax deductions for the self-employed.

IRS Requirements for Home Office Deduction

To qualify for a home office deduction, the space must be the primary location of your business — usually defined as the place where all the administrative tasks take place.

In addition, if you store inventory at your house for your business, that square footage may also qualify, though the IRS has specific qualifications you must meet.

This deduction is mostly used by self-employed individuals or small business owners who work from home. W-2 employees typically don’t qualify.

Amount You Can Deduct

The amount you can deduct is based on and proportional to how much of your home you use for your business.

For example, let’s say you paid $1,200 in HOA fees last year. If your home office takes up 20% of the home, you may be able to deduct 20% of those costs.

• $1,200 x 20% = $240

So, in this case, you could deduct $240 on your tax return using Form 8829. 

However, you should carefully review Publication 587 from the IRS to learn more about potential tax benefits and restrictions if you run your business out of your home.

Deductible HOA Fees by Property Type

Still wondering, “Are HOA fees tax-deductible?” Here’s an overview of when you can claim them based on your property type:

When HOA Fees Are Not Tax-Deductible

On the other hand, if you’re just living in your place and not renting it out or using it for a business, the IRS isn’t going to give you a break on those HOA fees.

Here are some instances when you can’t deduct HOA fees:

• Primary residence owners who do not rent out their property.

• Vacation homes are used solely for personal use.

• HOA special assessments are used for one-time repairs or improvements.

Quick Reference Table: Are HOA Fees Tax Deductible?

How to Claim HOA Fees on Your Taxes

After figuring out the answer to “Are HOA fees tax-deductible?”, the next step is understanding how to report them on your taxes properly.

• Rental property owners: Report HOA fees on Schedule E (Supplemental Income and Loss).

• Home office deduction: Use Form 8829 (Expenses for Business Use of Home).

• Keep detailed records and receipts in case you’re audited.

• Review IRS guidelines, like Publication 527 and Publication 587.

Tips for Maximizing Tax Deductions Related to HOA Fees

If you’re eligible, make sure to claim the rental property or home office deductions on your tax return using the appropriate form. Here are some strategies:

• Rent strategically: Renting out a second home even part-time may open the door to tax benefits

• Use your space wisely: If you’re self-employed, setting up a qualified home office can make a portion of your HOA fees deductible

• Keep detailed records: Maintain receipts, invoices, and rental agreements

• Work with a tax pro: A professional can help you navigate gray areas and stay IRS-compliant

Tamplin emphasized that because of the complexity of these tax rules, it’s always beneficial to chat with a tax pro.

“They’re the experts and can help you figure out exactly what you can and can’t deduct, especially since tax rules can change,” he said, adding that keeping good records is another smart move.

Keep your HOA invoices, receipts and tax documents for proof and store them in a secure location.

Final Thoughts to GO: Are HOA Fees Tax-Deductible?

So, are HOA fees tax deductible? For most homeowners, the answer is no. But there are two key exceptions:

1. Rental properties: HOA fees can be deducted as a necessary expense

2. Qualified home offices: A portion of HOA fees can be written off if you meet IRS guidelines

Before claiming any deduction, review IRS Publication 527 (Residential Rental Property) and consult a tax professional to ensure you qualify. With the right strategy, your HOA fees could help lower your tax bill.

While HOA fees are usually just a regular part of homeownership, they can become tax deductible in the right situations. If you’re a landlord or a self-employed homeowner with a dedicated workspace, don’t overlook this often-missed deduction.

FAQs About HOA Fees and Taxes

Here are some common questions and concerns you’ll run into if you’re wondering are HOA fees tax-deductible:

• Can I deduct HOA fees if I work remotely?

  • No, you generally have to be self-employed or a business owner (not a W-2 employee) to deduct HOA fees on your tax return.

• What if I rent my home for part of the year?

  • You might be able to deduct a prorated portion of HOA fees depending on how long you rented the home versus how much you used it personally.

• Are HOA special assessments deductible?

  • It may be tax-deductible if the special assessments were for maintenance or repairs; if they were for improvements, though, it’s likely not. However, you should always consult with a tax professional to be sure.

• Do HOA fees count toward capital gains taxes when selling my home?

  • Your regular HOA fees won’t affect your capital gains taxes, but special assessments may increase your cost basis if used for property improvements.

• Can I deduct HOA fees from my state taxes?

  • Many states follow the same income tax rules as the federal government, so you may be able to deduct them if you use the property as a rental or for business. If you want to learn more about the specific criteria for where you live, check with your state tax authority or a tax professional.

Information is accurate as of May 13, 2025.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

This article originally appeared on GOBankingRates.com: Are HOA Fees Tax Deductible? The Simple Answer