Discover the key tax deductions for Denver Airbnb hosts. Our guide covers local property tax breaks, business expenses, and depreciation strategies to maximize your rental income.
_______________________________

Essential Tax Deductions Every Denver Short-Term Rental Owner Should Claim

Maximize Your Rental Property Tax Savings in Denver

Operating a short-term rental in Denver can be a lucrative investment, but many property owners leave money on the table when tax season arrives. Understanding the specific deductions available to Denver hosts can significantly reduce your tax burden and increase your bottom line. At Simplify Renting, we’ve helped countless property owners navigate the complex tax landscape of short-term rentals in Colorado. This guide breaks down the essential deductions you should claim to keep more of your hard-earned rental income.

Property-Specific Deductions for Denver Rentals

Denver property owners face unique tax considerations that differ from other markets. Taking advantage of these locally-relevant deductions can make a substantial difference in your annual tax savings.

Denver Property Tax Deductions

Denver County property taxes are fully deductible as a business expense for your short-term rental. The city’s mill levy rates vary by district, but Denver’s relatively high property tax assessments make this a significant deduction. Keep your annual property tax statements organized, as they provide documentation for one of your largest potential deductions.

Colorado-Specific Depreciation Benefits

Denver property values have increased substantially in recent years, making depreciation a powerful tax strategy. You can deduct the cost of your rental property (excluding land value) over 27.5 years. With Denver’s median home price well above the national average, this typically translates to thousands in annual tax savings. Local property value assessments can help determine the appropriate depreciation amount for your specific property.

Denver Lodger’s Tax Credits

As a short-term rental operator in Denver, you’re required to collect the 10.75% lodger’s tax from guests. While this isn’t a deduction itself, proper documentation of tax collection and remittance is crucial for qualifying for related business expense deductions. Maintaining clear records of these tax payments protects you during audits and ensures you capture all eligible deductions.

Business Expense Deductions for Denver Hosts

Beyond property-specific deductions, Denver short-term rental owners can claim numerous business expenses that directly reduce taxable income.

Property Management Fees

If you work with a property management company like Simplify Renting, our 20% management fee is fully tax-deductible. This includes all services provided: guest communication, cleaning coordination, maintenance management, and more. Even with this deduction, our ability to generate 10% higher occupancy and 24% higher nightly rates typically results in greater net income compared to self-management.

Maintenance and Repairs

Denver’s climate, with its significant temperature fluctuations and occasional severe weather, can necessitate specific maintenance needs. Expenses for snow removal, HVAC servicing, winterization, and weather-related repairs are all deductible. Keep detailed records of all maintenance costs, including receipts and service descriptions.

Utilities and Services

Denver utility costs—including water, electricity, gas, internet, and cable—are fully deductible when used for your rental property. Local services like trash collection and recycling fees also qualify. If you offer premium amenities like streaming services or special entertainment options to guests, these subscription costs are deductible as well.

Furnishings and Supplies

The costs of furnishing and stocking your Denver rental property are deductible business expenses. This includes furniture, linens, kitchen supplies, decorative items, and consumables provided for guests. Items over $2,500 may need to be depreciated rather than expensed immediately, so consult with a tax professional about the best approach for major purchases.

Travel and Transportation Deductions

If you don’t live on-site or in the immediate area, you can deduct travel expenses related to your rental property management. This includes mileage for property visits, airfare for periodic inspections, and accommodations during maintenance or management trips. Be sure to document the business purpose of each trip and keep all related receipts.

Professional Services

Fees paid to accountants, tax preparers, attorneys, and other professionals for services related to your rental property are fully deductible. Given the complexity of short-term rental tax regulations in Denver, investing in professional guidance often pays for itself through identified tax savings opportunities.

Get Expert Help With Your Denver Short-Term Rental Taxes

Navigating tax deductions for your Denver rental property doesn’t have to be overwhelming. At Simplify Renting, we help property owners maximize their income while minimizing headaches—including tax complexities. Our comprehensive management approach includes guidance on record-keeping for tax purposes and connections to trusted tax professionals who specialize in short-term rental properties.

Ready to optimize your Denver property’s tax strategy while boosting your rental income? Contact Simplify Renting today for a free consultation and discover how our full-service management can create truly passive income from your short-term rental.