Tax Deductions for Landlords Who Rent Out Property

If you file under the general rental regime (régimen general de arrendamiento) instead of RESICO, you are entitled to claim SAT rental deductions that reduce the base on which your tax is calculated. These deductions cover expenses directly related to the property you rent, as long as you have the tax receipt (comprobante fiscal) issued in your name. Knowing exactly what you can and cannot deduct keeps you from paying more tax than necessary, and from running into trouble if the SAT reviews your annual return. There is also an alternative, the blind deduction (deducción ciega), a fixed percentage that simplifies the calculation when your actual expenses are low.

Expenses that qualify as deductions

The general rental regime lets you deduct a range of expenses as long as they are backed by an invoice in your name and are directly related to the rented property. The most common ones include property tax (predial) paid during the tax year, condominium maintenance fees, actual interest on a mortgage loan for that property, insurance premiums that protect the property, upkeep costs such as minor repairs and, in some cases, the commissions you pay to a real estate agency or manager for handling the rental. Each of these items must correspond specifically to the property that generates the declared income, not to other properties you own or to personal expenses unrelated to the rental.

The blind deduction option

If you prefer to simplify the calculation, the law allows you to apply a blind deduction (deducción ciega): a fixed percentage of your income that is subtracted automatically, with no need to document individual expenses. This option makes sense when your actual expenses are low compared to that percentage, for example if the property is relatively new and does not need constant maintenance. Before choosing between documented deductions and the blind deduction, it is worth running a comparison:

• Add up all your actual deductible expenses for the year that are backed by invoices
• Compare that total against the blind deduction percentage applied to your income
• If your documented expenses exceed the fixed percentage, deducting actual expenses is the better choice
• If your expenses are low, the blind deduction is usually simpler and more convenient

How to document your deductions

For an expense to be deductible, you need the corresponding CFDI (digital tax invoice) issued under your name and RFC, and the item must clearly relate to the property you rent. Personal expenses, or those that belong to another property, do not qualify, and the SAT can reject them if it detects inconsistencies during a review. Also keep your current lease agreements, since they serve as additional proof that the expense is tied to a genuine economic activity and not to your personal residence.

Frequently asked questions

Can I choose between the blind deduction and documented deductions each year?

The SAT allows you to switch from one tax year to the next, but it is wise to review the current rules with an accountant, since in some cases there are restrictions on changing your option within the same year.

Is furniture I buy for the property deductible?

It depends on the type of asset and whether it is depreciated or deducted immediately; check with an accountant to classify it correctly and avoid errors on your return.

Can I deduct expenses for a property that is not yet generating rental income?

In general, deductions must correspond to a period in which the property is already generating taxable income; expenses incurred before the first rental may require different tax treatment, so consult a specialist.