Broker Check

Mortgage Interest on RVs

| April 28, 2021

There has been a recent surge in RV sales as consumers are creatively finding ways to vacation amid economic restrictions due to the COVID pandemic. Some may not realize that their recreational purchase may also have income tax implications. 

For many taxpayers, the purchase of an RV may count as a “second home” since it allows them to travel to various destinations while still having access to many “home” amenities such as a kitchen, bathroom and bedroom.  The good news is the IRS allows the deduction of mortgage interest on a second home, therefore allowing taxpayers to potentially deduct finance charges on a loan used to purchase an RV.

In general, for RV interest to qualify as a deduction, taxpayers must follow the same rules that apply to the mortgage interest that is paid on their primary residence. However, extra due diligence may be required if a taxpayer has than two homes including their RV as taxpayers may only deduct the interest paid on two homes: a primary residence and a second home/vacation home. 

We recommend considering all factors when buying an RV such as cash flow, other homes, financing cost over time, and income tax implications beforehand.