How do property taxes impact rental property investments?

In India, property taxes on rental property investments are calculated based on the annual rental income received from the property. The property tax rate may vary from one municipality to another. Generally, property taxes on rental properties are deductible from the rental income earned before the calculation of income tax.

Investors must consider the property tax rate and the rental income earned while evaluating the profitability of a rental property investment. Higher property taxes may reduce the net rental income earned, reducing the profitability of the investment. Property taxes may also increase over time, which can impact the returns on the investment. Investors should ensure that they are aware of the property tax rates in the area where the rental property is located and factor them in while evaluating the investment.