If you’ve been thinking about getting into real estate—or doubling down—2025 just handed you a gift.
Bonus depreciation is back at 100%. And if you know how to use it, this tax tool can free up serious cash to reinvest, grow your portfolio, or simply boost your returns. Here’s what you need to know.
So, What Is Bonus Depreciation?
In plain English, bonus depreciation lets you write off the cost of certain assets right away instead of spreading that deduction over many years. In real estate, this can mean a big upfront tax deduction in the year you buy or improve a property.
That’s money you get to keep now—not 27.5 years from now.
Here’s an example: You buy a multifamily or commercial property. Normally, you’d depreciate it slowly over decades. But with bonus depreciation (especially when paired with a cost segregation study), you can carve out parts of the property—like flooring, appliances, HVAC systems—and write them off in full right away.
What Changed in 2025?
Let’s rewind: Under the 2017 Tax Cuts and Jobs Act, bonus depreciation jumped to 100%, allowing investors to take full first-year write-offs through 2022. Then it started phasing down:
2023: 80%
2024: 60%
2025 was supposed to drop to just 40%…
But now? Congress restored 100% bonus depreciation as of January 20, 2025—and it’s available through the end of 2029. That means any qualifying property placed in service after January 20, 2025 is eligible for the full write-off again.
Why This Matters (Especially If You’re in Real Estate)
If you own income-producing real estate or plan to buy in the near future, this is huge. Bonus depreciation lets you:
Offset more of your rental income (or even W-2 income if you qualify as a Real Estate Professional)
Improve your cash flow
De-risk your investment by recovering your capital faster
And for homeowners thinking about investing for the first time? This tool can supercharge the return on your first rental or short-term investment property.
Don’t Forget Cost Segregation
Bonus depreciation works best when combined with a cost segregation study. That’s how you break out the components of your property into shorter-life assets—so you can take advantage of 100% write-offs where they apply.
The ROI on a cost seg study? Often 10x or more what you spend. Especially now.
Final Thought: Time Your Moves
Not all purchases qualify—especially if they closed before Jan 20, 2025. So if you’re planning to buy, improve, or expand your real estate holdings, now’s the time to be intentional. The IRS won’t wait, and neither should you.
Thinking about your next investment move?
We’re not just real estate agents—we’re investors ourselves. Whether you’re buying your first home or rental or scaling your portfolio, we can guide you.
Let’s talk strategy—contact us to get started.