Good Tax News for NJ Residents Who Own Rental Properties
It’s good news for Jersey residents who own and rent out a house, condo, townhouse apartment or any other type of property.
Under the new tax laws approved last year, landlords will be getting a big new tax break when they file their taxes in 2019.
“It’s 20 percent of the net income, which is in addition to all of the expenses that the landlord already has,” said Peter Greco, the chief tax researcher for CSI Group.
He said this means if someone is collecting $30,000 rent a year on a property and “they have an expense of $10,000, and the net income is $20,000, they will be deducting an additional $4,000, so they’ll be paying tax on $16,000, not $20,000.”
He said landlords get this additional break in addition to all of the deductions they already claim, including insurance, depreciation, mortgage, tax and repairs.
Greco said this will be a big benefit for anyone who qualifies.
“Let’s say even somebody that has a rental property that they use also for themselves, for less than 14 days out of the year, that also becomes a rental property.”
He noted small businesses as well as individuals will be eligible to take this deduction “because landlords are really small business owners when they rent a property.”
He stressed whether you’ve got a house, condo, townhouse or apartment “this will apply to any rental property. I’m not aware of any property that’s excluded.”
Greco explained the idea behind the deduction is to help small businesses, of all types.
“When you own a piece of real estate, really you are a small business, because you are in the business of collecting rents,” he said.