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More than 75 million Americans live in one of the 365,000 communities with a homeowners’ association (HOA), according to the Foundation for Community Association Research. This includes people living in single-family homes, condos, or co-ops.
If you pay HOA dues, you’re likely wondering whether these fees are tax deductible. The short answer is usually no — HOA fees are generally not tax deductible. However, there are exceptions.
Read more: Should you buy a house with a homeowners' association?
In this article:
How HOA fees and special assessments work
HOA fees, also known as condo dues if you live in a condominium association, cover various expenses that the homeowners within the association share. HOAs typically maintain common areas in the community. In some situations, they pay for services like trash and snow removal, sewer and water bills, landscaping, and the upkeep of amenities such as a swimming pool and fitness center.
Associations also sometimes charge a special assessment for a significant project that impacts the community, such as adding a new amenity or making a repair not covered by insurance.
When are HOA fees tax deductible?
HOA fees are generally not tax deductible, along with other costs of homeownership, such as your homeowners insurance, utility bills, and regular maintenance expenses. However, a few IRS exceptions could allow you to deduct your HOA dues on your tax return.
HOA fees and rental properties
If you own an investment property that you rent to a tenant, you can deduct certain expenses for that investment on your income tax return. You may be able to take a tax deduction for all of your HOA dues on that property if you rent it to a tenant year-round. However, you typically cannot deduct special assessments for capital improvements to the community.
If you own a second home that you use occasionally and rent periodically for income, you may also be able to deduct a portion of your HOA dues. The amount you can deduct depends on how much of the year you rent your property. If you rent your property for 15 days or more annually, you can deduct HOA expenses for the days the property was rented.
If you rent out your property for fewer than 15 days, it is considered a second home, not a rental property. You won’t need to report your rental income or expenses, and you won’t be able to deduct your HOA dues.
Learn more: How to buy a second home
HOA fees and a home office
If you take a home office deduction and are self-employed, a portion of your HOA dues can be considered tax deductible. The amount you can deduct for your HOA dues depends on how much of your home is used for your home office. For example, if your home office is the equivalent of 10% of your home, you may be able to deduct 10% of your HOA dues.
Dig deeper: Home office deduction — Who can claim it, and how much can you save?
How to deduct HOA fees on your taxes
Choose between standard and itemized deductions
All taxpayers are allowed to take the standardized deduction when filing their taxes. This is a pre-determined amount set by the IRS. However, you may choose to itemize your deductions instead — this means writing off all of your deductions, not just your HOA dues, individually and forgoing the standardized deduction.
Itemized deductions are better if you’ll save more than if you took the standard tax deduction. Here are the standard deduction limits for tax years 2024 and 2025. (Remember, you’ll pay your 2024 taxes in 2025 and 2025 taxes in 2026.)
If you can save more by itemizing your deductions, it may be worth it to write off your HOA fees.
Learn more: What to know about standard vs. itemized deductions
Deducting your HOA dues
If you believe you qualify for one of the above exceptions that make your HOA fees tax deductible, you should probably consult a tax advisor to ensure you comply with all the details.
To qualify for HOA fee deductions due to your home office, you’ll need to meet IRS requirements, such as using the space exclusively for work. You may be able to use a simplified method to determine how much you can deduct for your home office, including HOA fees. Details about the home office deduction can be found in IRS Publication 587, and you’ll file any deductions related to your home office on Schedule C.
You’ll use Part 1 of Schedule E to list rental income and expenses to take a tax deduction for your HOA fees for a second home. If you rent your second home part-time, it may be best to consult a tax specialist because the rules are complicated. You can also review IRS Publication 527.
HOA fees and tax deductions: FAQs
Are HOA fees deductible on a vacation home?
Maybe. If you use your vacation home personally for more than 14 days (e.g., for a three-week family trip in the summer), it is not considered a rental property, and you won’t be allowed to deduct your HOA fees. If you rent out your vacation home for at least 15 days per year, you may be eligible to deduct a portion of your HOA dues.
Which homeownership expenses can I deduct on my taxes?
Your home mortgage interest payments and state and local property taxes are often tax deductible. Most other homeownership expenses, such as your HOA dues, your homeowners insurance, and your utilities, are not typically tax deductible (though there are exceptions).
Do HOA dues impact capital gains taxes when I sell my house?
Even if you don’t meet the requirements to deduct your HOA dues, such as having a home office or a rental property, you may want to keep track of your HOA fees and special assessments while you own your home. When you sell your home, you may need to pay a capital gains tax on the profit from a sale. Your HOA payments could increase the cost basis of your home, which in turn may lower your capital gains tax.
This article was edited by Laura Grace Tarpley.
