In addition to mortgage interest costs, commercial and multifamily real estate investors can deduct property repairs, maintenance costs, certain property management expenses, and many other operating expenses from their income taxes.

Can you claim mortgage interest on commercial property?

Landlords can claim tax relief on mortgage interest payments. This tax relief is being phased out by 2020. The tax changes do not apply to commercial property but for semi-commercial property, the commercial mortgage interest payments on the residential portion of the building are subject to the cuts in tax relief.

When to determine tax basis for commercial property?

However, many investors don’t realize that determining tax basis is also important before you sell a property since a property’s tax basis also plays a role in determining depreciation. The IRS allows commercial real estate investors to deduct depreciation from a commercial real estate building (as well as any capital improvements made).

How to claim exemption from commercial property tax?

You can claim exemption under Section 54F, by investing the net proceeds obtained from the sale of commercial property in a residential house property, if the same has been held for more than 24 months as per some of the judicial pronouncements.

What kind of tax do you pay on a commercial property?

People who invest in commercial properties, do so either for their own use or for the purpose of letting it out. Rentals received from any property owned by you, is generally taxed under the head ‘ income from house property ‘ in your hands. This applies to all properties, whether residential or commercial.

Can You claim interest on a commercial property?

You can also claim the full interest as business expenditure, without there being any limit. Please note that no deduction is available under Section 80C for home loan taken for such commercial property, for repayment of the principal amount, as this is available only for residential property.