Yes, you can deduct the property taxes (subject to the state and local limitation of $10,000) as an itemized deduction. The other expenses you incur, including mortgage interest prior to placing the unit in service are "start up" cost. You can deduct up to $5,000 of start up costs. This would include mortgage interest, insurance, utilities, minor repairs, cleaning, condo fees, etc. Expenses in excess of the first-year limit of $5,000 must be amortized (deducted in equal amounts) over the first 180 months (15 years).
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