State Guide 10 min read Updated June 2026

Rental Property Taxes in Louisiana (2026 Guide)

Louisiana rewrote its income tax for 2025 (Act 11), collapsing the old brackets into a flat 3% rate — one of the lowest in the South — and pairing it with some of the cheapest property taxes in the country. It even lets landlords fully expense qualifying property on the state return. The catches are the homestead exemption a rental can't claim and Louisiana's own depreciation reconciliation. Here is what Louisiana landlords need for 2026.

State Income Tax
Flat 3%
Assessment Ratio
10% of value
LLC Annual Fee
$35
Rent Control
None

In This Guide

  1. 1. Property Tax: Low Rates, but No Homestead Break
  2. 2. Income Tax: New Flat 3% (Act 11, 2025)
  3. 3. Capital Gains on a Sale
  4. 4. Bonus Depreciation: Immediate Expensing, then Add-Back
  5. 5. No Statewide Transfer Tax
  6. 6. LLC Fees
  7. 7. Rent Control
  8. 8. Security Deposit Rules
  9. 9. How SheltrIQ Helps Louisiana Landlords

1. Property Tax: Low Rates, but No Homestead Break

Louisiana has some of the lowest effective property taxes in the country — roughly 0.55% of market value statewide, though it varies by parish. Residential property is assessed at 10% of fair market value (Louisiana Constitution Art. VII, Sec. 18), and the parish millage is applied to that assessed value.

The catch for landlords: Louisiana's homestead exemption — the first $75,000 of fair market value ($7,500 of assessed value) free of all but municipal taxes — applies ONLY to an owner's primary residence (Art. VII, Sec. 20). A rental gets none of it, so on an identical home a landlord is taxed on the full assessed value while an owner-occupant next door pays on the value above $75,000.

2. Income Tax: New Flat 3% (Act 11, 2025)

Act 11 of the 2024 Third Extraordinary Session replaced Louisiana's old 1.85%/3.5%/4.25% graduated brackets with a single flat 3.0% rate on individual income, effective for tax year 2025 and forward (R.S. 47:32), and roughly doubled the standard deduction. The rate is not inflation-indexed.

Rental net income flows from your federal return — Louisiana starts from federal adjusted gross income and applies the flat 3% after Louisiana adjustments — so an accurate Schedule E drives an accurate Louisiana return.

3. Capital Gains on a Sale

Louisiana taxes capital gains as ordinary income at the flat 3% — there is no preferential long-term rate. Louisiana does have a capital-gains exclusion, but it is limited to the net gain from the sale of a Louisiana business (an equity interest in, or substantially all the assets of, a non-publicly-traded Louisiana entity) under R.S. 47:293 — it does not reach a rental real-estate sale. Plan on the full 3% applying to a disposition gain.

4. Bonus Depreciation: Immediate Expensing, then Add-Back

Louisiana is unusually generous here. Under the 2024 reform, you may fully expense qualifying property on the Louisiana return in the year it is placed in service — Louisiana adopts the federal §168(k) definitions of qualified property and qualified improvement property as in effect January 1, 2024.

Because the asset is already fully expensed for Louisiana in year one, you then ADD BACK to Louisiana income the federal depreciation you claim on that same property in each following year (LA Dept of Revenue bonus-depreciation FAQ). The net effect front-loads the deduction relative to the federal schedule — a timing advantage — but it requires tracking a separate Louisiana basis so the add-backs reconcile over the asset's life.

5. No Statewide Transfer Tax

Louisiana's constitution prohibits real-estate transfer taxes statewide (Art. VI, Sec. 25). The lone exception is the City of New Orleans documentary transaction tax, a flat fee charged on the act of sale that was grandfathered in. Everywhere else, a sale costs only the ordinary parish recording fees — a meaningful saving versus the percentage transfer taxes most states charge.

6. LLC Fees

A Louisiana LLC files an annual report with the Secretary of State — $35 online ($30 by mail) — due on the anniversary of formation. There is no separate franchise tax on a standard pass-through LLC (the corporation franchise tax was repealed for periods beginning in 2026), so the annual carrying cost of holding a rental in a Louisiana LLC is modest.

7. Rent Control

Louisiana has no statewide rent control, and no Louisiana parish or municipality currently imposes a rent cap — including New Orleans. You set rents at market. (Unlike many states, Louisiana does not have an explicit statute pre-empting local rent control, but none has been adopted.)

8. Security Deposit Rules

  • No statutory cap on the deposit amount (R.S. 9:3251).
  • Return within one month of the lease terminating, with a written itemized statement of any amounts retained and the reasons for them.
  • Keep records — a landlord who fails to return the deposit or provide the itemized statement in time can be liable for damages, so document the condition and any deductions.

9. How SheltrIQ Helps Louisiana Landlords

Louisiana's 2025 reform changed both the rate and the depreciation math — SheltrIQ keeps your return on the current rules:

  • Flat 3% income modeling — applies the Act 11 rate from a federal-AGI base, not the repealed graduated brackets.
  • Bonus-depreciation tracking — handles Louisiana's immediate-expensing election and the reconciling federal-depreciation add-back in later years, with a separate Louisiana basis.
  • Disposition modeling — applies the flat 3% to a rental sale gain and flags that the Louisiana business-sale capital-gains exclusion does not apply.
  • AI Schedule E classification — sorts each expense to the right line so your Louisiana income starts from an accurate federal return.

Maximize Your Louisiana Rental Deductions

SheltrIQ's AI handles state-specific tax rules so you don't leave money on the table.

Get Started Free