Can a vacant property be considered a rental or short-term rental?

Question

Hi Everyone - I bought my first home 1.5 years ago without realizing that the rental cap on the building was filled. Now, I have a job in another city that I have to move for and I'm not off the wait list to rent out my condo. Am I still able to classify my property as a rental or short-term rental for tax purposes once I move although I'll be unable to rent it out until I'm off the wait list?

Appreciate any help or advice!

Natalie Kolodij · Answer

Unfortunately no. It's not in service - meaning ready and available for rent.

You can treat it as a second home for now and if you itemize you can deduct the mortgage interest/prop taxes on Sch A of your 1040.

Marc Howard · Answer

@Lily Scanlan tricky situation you've got theree. Technically, you can't classify your property as a rental or short-term rental for tax purposes if you're not actually renting it out. Bummer, I know.

But once you're off that wait list and start renting your condo, you can definitely take advantage of the tax benefits associated with rental properties. So hang in there, and good luck with your move and new job!

Can a vacant property be considered a rental or short-term rental?

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