According to the Foundation for Community Association Research, more than 75 million Americans live in one of the 365,000 communities with a homeowners’ association (HOA). This includes people who live in single-family homes, condos, or cooperatives.
If you pay HOA dues, you’re probably wondering whether these costs 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 through an Owners’ Association?
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HOA fees, also called condo dues if you live in a condominium association, cover various expenses shared by homeowners within the association. HOAs typically maintain common areas in the community. In some situations, they pay for services such as trash and snow removal, sewer and water bills, landscaping and maintenance of amenities such as a pool and fitness center.
Associations also sometimes charge a special assessment for a major project that impacts the community, such as adding a new facility or making a repair not covered by insurance.
HOA fees are generally not tax deductible, along with other costs of homeownership, such as your homeowner’s insurance, utility bills and regular maintenance costs. However, there are some IRS exceptions that allow you to deduct your HOA dues on your tax return.
HOA costs and rental properties
If you own an investment home that you rent to a tenant, you can deduct certain costs for that investment on your income tax return. You may be able to get a tax deduction for all your HOA dues for that property if you rent it to a tenant year-round. However, you generally 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 part of your HOA dues. The amount you can deduct depends on the part of the year that you rent your home. If you rent your home for 15 days or longer each year, you can deduct homeowners’ association costs for the days that the home was rented out.
If you rent your home for less than 15 days, it is considered a second home and not a rental property. You do not have to report your rental income or expenses and you cannot deduct your HOA dues.
More information: 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 may 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 house, 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?
Choose between standard deductions and itemized deductions
All taxpayers are allowed to use the standardized deduction when filing their taxes. This is a predetermined amount determined by the tax authorities. However, you can choose to itemize your deductions instead – this means you write off all of your deductions, not just your HOA dues, individually and forego the standardized deduction.
Itemized deductions are better if you save more than if you took the standard tax deduction. These are the standard deduction limits for tax years 2024 and 2025. (Keep in mind that you will pay your 2024 taxes in 2025 and your 2025 taxes in 2026.)
If you can save more by itemizing your deductions, it may be worth writing off your HOA fees.
More information: What you need to know about standard deductions versus itemized deductions
If you think you qualify for one of the above exceptions that would make your HOA fees tax deductible, you should probably consult a tax advisor to make sure you meet all the details.
To qualify for an HOA deduction due to your home office, you must meet IRS requirements, such as using the space solely 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 file any deductions related to your home office on Schedule C.
You use Part 1 of Schedule E to itemize rental income and expenses to get a tax deduction for your HOA fees for a second home. If you rent out your second home part-time, it may be best to consult a tax specialist, as the rules are complicated. You can also review IRS Publication 527.
Maybe. If you use your vacation home personally for more than 14 days (for example, for a three-week family trip in the summer), it is not considered a rental property and you may not deduct your HOA fees. If you rent out your holiday home for at least 15 days a year, you may be eligible for a deduction of part of your homeowners’ association membership fee.
Your mortgage interest payments and state and local property taxes are often tax deductible. Most other homeownership costs, such as your HOA dues, homeowner’s insurance, and your utilities, are generally not tax deductible (although there are exceptions).
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 have to pay capital gains tax on the profit from the sale. Your HOA payments can increase the cost basis of your home, which in turn can lower your capital gains taxes.
This article was edited by Laura Grace Tarpley.
