When it comes to buy-to-let investments, there are a number of expenses that you can deduct from your taxes. These expenses can include mortgage interest, property taxes, operating expenses, depreciation and repairs. All of these costs are considered ordinary and necessary expenses for managing, maintaining and improving your rental property. Rather than making a large deduction when buying (or improving) a property, depreciation allows you to deduct costs over the life of the property. This means that you can spread out the deduction over several years, which can help to reduce your tax burden. There are certain rules that apply to deducting interest from loans used to buy or improve a rental property.
However, to qualify for the Qualified Business Income (QBI) deduction, rental real estate must reach the level of an operation or business under section 162 of the Internal Revenue Code, among other restrictions.