You’ve just opened your mailbox. There it is—the monthly statement from your Homeowners Association (HOA). Whether it’s $200 or $1,200, it’s a chunk of change that feels like a second property tax. Naturally, when tax season rolls around, your first thought is: "Can I write this off?"
Honestly, the answer is a bit of a bummer for most people.
For the vast majority of homeowners in 2026, HOA fees are not tax deductible. The IRS views these payments as personal living expenses. It’s categorized in the same bucket as your Netflix subscription or your grocery bill. If you live in the house as your primary residence and just go to work every day, you're likely out of luck.
But don't close the tab just yet. There are a few very specific "loopholes"—or rather, legitimate tax rules—where those fees suddenly become a goldmine for deductions.
When the IRS Actually Lets You Deduct HOA Fees
The "rule of thumb" changes the second you stop using your home purely for personal joy. If your property starts making you money, the IRS starts caring about your expenses.
1. The Rental Property Strategy
If you own a condo or a townhome and you rent it out to a tenant, those HOA fees are 100% deductible. Period. In this scenario, the IRS sees you as a business owner. Your HOA dues are considered an ordinary and necessary cost of doing business. You’ll report these on Schedule E (Form 1040).
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Think about it this way: You can't rent out a condo if the association locks the front gate because you didn't pay the dues. Therefore, the fee is a requirement for generating that rental income.
2. The Home Office Hustle
This is where things get a bit more "mathy." If you’re self-employed—maybe a freelance designer or a consultant—and you have a dedicated space in your home used exclusively for work, you might be able to snag a partial deduction.
You can't just work from your kitchen table. It has to be a specific room or area used only for business.
Let's say your home is 2,000 square feet and your office is 200 square feet. That’s 10% of your home. In that case, you can generally deduct 10% of your total HOA fees. You’ll use Form 8829 to figure this out and then drop it onto Schedule C.
Important Note: If you are a W-2 employee working remotely for a company, you cannot claim the home office deduction. This was a change that happened years ago and, as of 2026, it still hasn't flipped back. You have to be your own boss to play this card.
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The "Special Assessment" Surprise
Every once in a while, an HOA will hit you with a "special assessment." Maybe the roof on the clubhouse collapsed or the community pool needs a $50,000 resurfacing. These one-time fees can be massive.
Can you deduct these? Kinda, but usually not directly.
If the assessment is for repairs and maintenance (like fixing a leak), and the property is a rental, you can usually deduct it in the year you pay it. However, if the assessment is for an improvement (like building a brand-new gym), you can't deduct it today. Instead, you add it to your "cost basis."
Why does that matter? Well, when you eventually sell the house, a higher cost basis means you show less profit to the IRS, which can lower your capital gains tax. It’s a "future you" win.
Real-World Math: A Quick Example
Let’s look at "Sarah." She owns a condo in a neighborhood with a $400 monthly HOA fee.
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- Scenario A: Sarah lives there. Total deduction: $0.
- Scenario B: Sarah rents the condo out for $2,500 a month. Total deduction: **$4,800 per year** ($400 x 12).
- Scenario C: Sarah lives there but uses 15% of the square footage as a legitimate photography studio for her business. Total deduction: **$720 per year** ($4,800 x 15%).
Common Misconceptions to Avoid
A lot of people think HOA fees are basically property taxes. They aren't. Property taxes go to the government; HOA fees go to a private corporation (your association). This is why you can often deduct property taxes on your Schedule A (up to the $40,000 SALT limit in 2026) but you can't touch the HOA fees.
Another weird one? Vacation homes. If you have a beach house that you use for two weeks and leave empty the rest of the year, those fees are personal. If you rent it out for 15 days or more, you enter the world of "mixed-use" property, and you have to start prorating the fees based on how many days it was rented versus how many days you stayed there. It’s a headache, honestly.
How to Stay Out of Trouble
If you’re going to claim these, keep your records tight.
- Save the year-end statement: Your HOA should send a summary of everything you paid.
- Keep the "Special Assessment" letter: You need to prove whether that $2,000 check was for a "repair" or an "improvement."
- Measure your office: Don't guess the square footage. If the IRS ever knocks, they love bringing out the measuring tape.
Actionable Next Steps
If you think you qualify for an HOA deduction, here is what you need to do right now:
- Identify your status: Are you a landlord or a business owner? If you're a W-2 remote worker, stop here; you don't qualify.
- Calculate your percentage: If using a home office, find your total home square footage and divide it by your office square footage to get your "business use percentage."
- Check your records for special assessments: Look back through 2025 and 2026 to see if any large, one-time fees were paid and what they were specifically for.
- Consult Publication 527 or 587: These are the IRS "bibles" for rental property and home office use. They aren't fun to read, but they are the final word.
The bottom line is that for most of us, that HOA fee is just the price of living in a nice spot. But if you’re using that spot to build a business or host a tenant, make sure you aren't leaving money on the table.