Are Municipal Taxes deductible? Nathan Carroll Shupilov Success Team Follow Unlike some Legal Fees and the Welcome Tax, Municipal Taxes are immediate tax deductions for investment properties with with sole purpose of producing rental income. Example: If your investment condo makes $12,000 a year in Gross Rental income and you pay $4,000 a year in Municipal Taxes, you can deduct the $4,000 from your final NET income, bringing down your total taxable obligation to $8,000. Related articles Is the Welcome Tax deductible? Are School Taxes deductible? What is a Real Estate Investment Trust (REIT)? Can you deduct legal, accounting, and other professional fees? Are Condo Fees tax deductible? Comments 0 comments Please sign in to leave a comment.