How to Deduct Utilities as an Airbnb Host

Published March 19, 2026  ·  8 min read

Utilities are one of the most significant ongoing costs for short-term rental hosts — and they are fully deductible as rental business expenses. The mechanics depend on whether your property is used exclusively for rentals or is also your personal residence. This guide walks through every common utility type and shows you exactly how to calculate and report your deductions.

Which Utilities Are Deductible?

IRS Publication 527 explicitly lists utilities as a deductible rental expense. This includes:

• Electricity — Lighting, HVAC, appliances
• Natural gas or propane — Heating, cooking
• Water and sewer
• Trash collection
• Internet service — If provided to guests (nearly universal for Airbnb hosts)
• Cable TV or streaming services — If provided as a guest amenity
• Security system monitoring — If protecting the rental property

Mixed-Use Properties: The Allocation Requirement

Most Airbnb hosts rent out all or part of a property they also use personally — whether it is their primary home, a second home, or a property where they stay occasionally. In these cases, the IRS requires you to allocate utility deductions between rental use and personal use. You cannot deduct the personal portion.

Method 1: Time-Based Allocation

Divide the number of rental days by the total number of days the property was used during the year (rental days + personal days). Vacant days when the property is neither rented nor used personally can be allocated to rental or personal use depending on the specific expense and your situation — consult a CPA for the finer points.

Method 2: Square Footage Allocation

If you rent only a portion of your home — a guest suite, basement apartment, or separate unit — allocate by square footage. Divide the rented area by the total livable area.

For utilities that serve shared spaces (heating a shared hallway, for example), the square footage method is generally more accurate than a pure time allocation.

Internet: A Special Case for Airbnb Hosts

Internet is nearly mandatory for Airbnb listings — guests expect it and listing quality scores often depend on it. Here is how to handle it:

• Dedicated rental property: Deduct 100% of the internet bill
• Home where you also use the internet: Allocate by rental days or consider a reasonable business-use percentage that reflects the fact that having internet available for guests is a core rental expense even when guests are not present
• Upgraded plan for guests: If you upgraded from a basic plan to a faster plan specifically to accommodate guests, the incremental cost of the upgrade may be fully deductible as a rental expense even if your personal use is high

Cable TV and Streaming Services

If you provide cable TV or streaming service access (Netflix, Hulu, Apple TV+, etc.) for guest use, these costs are deductible rental expenses. For a dedicated rental, deduct 100%. For a mixed-use property, apply your rental-use allocation percentage.

If you subscribe to a service only during active rental periods and cancel when you use the property personally, you can deduct 100% of those subscription costs during the rental period.

Telephone / Cell Phone

A cell phone used for managing your Airbnb — communicating with guests, coordinating cleaners, responding to messages — qualifies for a partial deduction. The deductible portion equals the percentage of your phone use dedicated to the rental business. Common allocations range from 20% to 50% depending on hosting volume. Keep a contemporaneous log of business vs. personal calls if you claim a high percentage.

HOA Fees and Common Area Utilities

If your rental is in a condo or HOA community and the HOA fee covers utilities (water, trash, basic cable), the rental-use portion of those HOA fees is deductible. Report on Schedule E, Line 19 ("Other"). If the HOA fee is a flat charge covering multiple services, use the same rental-use percentage to allocate the deductible portion.

Utilities During Vacancy

A common question: can you deduct utilities during months when the property sits vacant? The IRS rule is that you can deduct expenses for periods the property was available for rent, even if no one was actually renting it. If your rental is listed but vacant in January, utility costs for that month are deductible.

Documenting Utility Deductions

Good documentation protects you if the IRS questions your deductions. For each utility:

1. Keep monthly bills or year-end summary statements
2. Maintain a rental activity log showing rental dates and personal use dates
3. Document your allocation method in a simple spreadsheet
4. Note any upgrades made specifically for guest benefit

For detailed guidance on keeping rental records, see our Airbnb record-keeping guide.

The Impact of Utility Deductions on Your Tax Bill

Utility deductions can meaningfully reduce your taxable income. Consider this example: a host with $30,000 in rental income and $8,000 in utility costs (on a dedicated rental) reduces taxable income to $22,000 before other deductions. At a 22% marginal rate, those utility deductions save $1,760 in federal income tax alone. See all the deductions available to you in our complete guide to Airbnb tax deductions.

Sources: IRS · IRS · IRS. This article is for informational purposes only.