Are you considering investing in an owner-occupied property? If so, it’s important to understand the tax benefits that come with this type of investment. Owning a rental property as your primary residence can provide numerous financial advantages, from deductions on mortgage interest and taxes paid to depreciation on the building itself.

Mortgage Interest

For starters, the interest paid on your mortgage for an owner-occupied property is typically tax-deductible. This means you can deduct the interest portion of your monthly mortgage payments from your taxable income each year, giving you a larger refund or reducing what you owe to Uncle Sam. Additionally, lenders often provide deductions on other services related to the loan, such as title and escrow fees.

Repairs and Improvements

Tax laws also allow investors to deduct the cost of repairs made on a rental property each year. This includes minor maintenance items like changing light bulbs or painting walls, as well as larger improvements such as replacing appliances or remodeling a bathroom. Any costs associated with these repairs can be deducted at tax time, resulting in significant savings for owners of an owner-occupied property.


Finally, investors can depreciate their owner-occupied property each year. This allows you to write off a portion of the total cost of your investment on your taxes. The IRS considers residential rental properties to have a useful life of 27.5 years and assigns this depreciation rate. This means you can deduct an amount equal to 3.6% of the total cost of your investment each year for 27.5 years, providing considerable tax incentives for those who use rental properties as their primary residence.

As you can see, there are numerous tax benefits to owning a rental property as a primary residence. From deductions on mortgage interest and taxes paid to depreciation for the building itself, investing in an owner-occupied property can provide a great deal of financial security due to tax incentives. It’s important to do your research and understand all of the available tax benefits before you make any investment decisions – but when used correctly, these incentives can help you maximize your returns.

If you need financing for owner-occupied properties, contact the team at GM Capital Group today.