Is Lawn Care Tax Deductible for a Rental Property?

Yes, lawn care expenses for a rental property are tax-deductible. Landlords can treat these costs as a business expense to manage and maintain their income-producing property. Keeping a rental’s exterior presentable is part of the cost of doing business, similar to repairing a leaky faucet or painting a room. These expenditures are for the upkeep of the property, ensuring it remains attractive to tenants, and the expense must be for the rental property itself, not the owner’s personal residence.

Defining Deductible Lawn Care Expenses

For a lawn care expense to be deductible, the IRS requires it to be both “ordinary and necessary.” An ordinary expense is common in the business of renting property, while a necessary expense is helpful and appropriate for the business. This means the costs incurred are for maintaining the property’s exterior and keeping it in good condition for the tenant.

Common examples of deductible lawn care maintenance include payments to a professional service for regular mowing, trimming, and edging. The costs of seasonal services like fertilization, weed control, and pest treatments for the lawn and garden beds also qualify. Expenses for spring and fall clean-ups, such as leaf removal or pruning existing shrubs, are also deductible, as these activities keep the property in its current rentable condition.

If a landlord chooses to perform the lawn care themselves, they can deduct the direct costs of the materials and supplies used. This includes items like fertilizer, grass seed, weed killer, and fuel for equipment. Landlords cannot deduct the value of their own labor or time spent on the work, as the deduction is limited to the money spent on goods.

Distinguishing Maintenance from Capital Improvements

Routine maintenance expenses and capital improvements receive different tax treatment. Maintenance costs are deducted in the year they are paid, while a capital improvement is a cost that must be depreciated over several years. A capital improvement adds value to the property, prolongs its useful life, or adapts it to new uses.

Examples of landscaping projects classified as capital improvements include installing a new fence, building a deck or patio, or putting in a new sprinkler system. A complete redesign of the property’s landscaping or the installation of a retaining wall also falls into this category. These are not simple repairs but substantial upgrades whose costs are recovered through depreciation over a set number of years.

The distinction is based on the scope and intent of the work. Mowing the grass maintains the property’s current state, making it a deductible expense. Planting a new row of mature trees where none existed before adds to the property’s value, making it a capital improvement.

How to Claim the Deduction

To claim deductible lawn care expenses, landlords report them on Schedule E (Form 1040), Supplemental Income and Loss. This form is used to report income and expenses from rental real estate. The costs can be listed under the “Repairs” line or included in the “Other expenses” line with a description such as “Grounds Maintenance.”

Record-keeping is required to substantiate these deductions. Landlords must save all receipts, invoices, and bank statements that show payment for lawn care services and supplies. These documents serve as proof of the expenses if the IRS were to conduct an audit, and each record should indicate the date, amount paid, and service received.

For mixed-use properties, such as a duplex where the owner lives in one unit and rents out the other, expenses must be allocated. If a lawn care service treats the entire property, the landlord can only deduct the portion of the cost that corresponds to the rental unit’s share of the property, based on square footage. For example, if the rental unit is 50% of the property, only 50% of the lawn care bill is deductible.