What is a typical cost segregation reclassification rate?

Typical reclassification rates range from 17% to 30% of the depreciable basis, depending on property type. Short-term rentals average 30% due to high FF&E content, while industrial properties average 17% due to simpler interior buildouts. These percentages represent the share of depreciable basis reclassified from the default 27.5-year or 39-year schedule into 5-year, 7-year, and 15-year MACRS classes.

How much does a cost segregation study save in taxes?

Tax savings depend on property type, purchase price, and your tax bracket. At the 37% federal bracket, a $500K Airbnb typically saves approximately $44,400 in year-one taxes, while a $500K single-family rental saves approximately $29,600. Commercial properties save proportionally more because their default 39-year schedule creates greater acceleration when components are reclassified.

What is the ROI on a cost segregation study?

ROI ranges from 19x to over 100x depending on property type and value. A $500K Airbnb generates approximately $44,400 in tax savings against a study cost of $795, yielding a 56x return. Even the lowest-ROI combination (a $300K condo at 19x) still delivers $15,096 in savings against a $795 study cost.

Is 100% bonus depreciation available in 2026?

Yes. The One Big Beautiful Bill Act (signed July 2025) permanently restored 100% bonus depreciation for property placed in service in 2025 and beyond. All assets reclassified into 5-year, 7-year, and 15-year MACRS classes through cost segregation are eligible for full first-year deduction.

Cost Segregation Benchmarks by Property Type (2026)

Estimated Year-1 Tax Savings: Residential Properties

Tax savings at the 37% federal bracket with 100% bonus depreciation. Land excluded at 20% of purchase price.

Property Type	Accel %	$300K	$500K	$750K	$1M	$1.5M	$2M
Airbnb / STR	30%	$26,640	$44,400	$66,600	$88,800	$133,200	$177,600
Single-Family Rental	20%	$17,760	$29,600	$44,400	$59,200	$88,800	$118,400
Duplex	22%	$19,536	$32,560	$48,840	$65,120	$97,680	$130,240
Triplex	22%	$19,536	$32,560	$48,840	$65,120	$97,680	$130,240
Fourplex	22%	$19,536	$32,560	$48,840	$65,120	$97,680	$130,240
Condo / Townhome	17%	$15,096	$25,160	$37,740	$50,320	$75,480	$100,640
Multifamily (5+)	22%	$19,536	$32,560	$48,840	$65,120	$97,680	$130,240

"Accel %" is the share of depreciable basis reclassified from the default 27.5-year schedule into 5-year, 7-year, and 15-year MACRS classes. STR rates include furnished FF&E. Actual reclassification varies by property age, condition, renovations, and geography.

Estimated Year-1 Tax Savings: Commercial Properties

Commercial properties depreciate over 39 years by default, making acceleration proportionally more impactful. Land excluded at 25%.

Property Type	Accel %	$500K	$1M	$2M	$3M	$5M
Office	19%	$26,362	$52,725	$105,450	$158,175	$263,625
Retail	20%	$27,750	$55,500	$111,000	$166,500	$277,500
Industrial	17%	$23,588	$47,175	$94,350	$141,525	$235,875
Commercial	19%	$26,362	$52,725	$105,450	$158,175	$263,625

Commercial basis assumes 25% land allocation (75% depreciable). Actual land ratios vary by location and property type. Tenant-owned improvements may reduce the landlord's reclassifiable basis.

Typical MACRS Class Allocation (% of Total Basis)

How the depreciable basis is typically distributed across IRS recovery classes after cost segregation.

Property Type	5-Year	7-Year	15-Year	Default	Schedule
Airbnb / STR	21%	2%	7%	70%	27.5yr
Single-Family Rental	12%	2%	6%	80%	27.5yr
Duplex	12%	2%	8%	78%	27.5yr
Triplex	12%	2%	8%	78%	27.5yr
Fourplex	12%	2%	8%	78%	27.5yr
Condo / Townhome	11%	3%	3%	83%	27.5yr
Multifamily (5+)	11%	3%	8%	78%	27.5yr
Office	9%	3%	8%	81%	39yr
Retail	9%	3%	8%	80%	39yr
Industrial	6%	2%	9%	83%	39yr
Commercial	9%	3%	8%	81%	39yr

Percentages represent share of total depreciable basis (not just the accelerated portion). 5-year: personal property (furniture, appliances, fixtures, carpet). 7-year: certain equipment and dedicated systems. 15-year: land improvements (paving, landscaping, fencing, site work). Default: building structure remaining on the standard schedule.

Study Cost and ROI by Property Type

Return on study cost (tax savings divided by study fee) at the 37% bracket with 100% bonus depreciation.

Property Type	$300K	$500K	$1M	$2M
Airbnb / STR	34x	56x	74x	137x
Single-Family Rental	22x	37x	50x	91x
Duplex	20x	33x	44x	77x
Triplex	20x	33x	44x	77x
Fourplex	20x	33x	44x	77x
Condo / Townhome	19x	32x	42x	78x
Multifamily (5+)	13x	22x	44x	87x
Office	11x	18x	35x	35x
Retail	11x	19x	37x	37x
Industrial	9x	16x	32x	32x
Commercial	11x	18x	35x	35x

ROI = (estimated year-1 tax savings) / (study cost). Study fees range from $795 for residential under $1M to $6,995 for large commercial properties. All returns assume 37% marginal federal tax rate.

Bonus Depreciation Rate by Year

The percentage of reclassified assets that can be deducted in year one.

Tax Year	Bonus Rate	Status
2022 and prior	100%	TCJA original
2023	80%	TCJA phase-down
2024	60%	TCJA phase-down
2025+	100%	OBBBA (permanent)

The One Big Beautiful Bill Act (signed July 2025) permanently restored 100% bonus depreciation for qualified property placed in service in 2025 and beyond. All benchmarks on this page assume 100% bonus depreciation.

Methodology and Assumptions

These benchmarks represent typical results based on engineering-based cost segregation analysis across a range of property types and price points. Key assumptions:

Tax rate: 37% federal marginal rate (top bracket). Lower brackets produce proportionally lower savings.
Land allocation: 20% for residential, 25% for commercial. Actual land-to-building ratios vary significantly by location.
Bonus depreciation: 100% (2025+ under OBBBA). All reclassified assets deducted in full in year one.
Property age: Mid-age assumptions. Newer properties may have higher reclassification rates due to more detailed cost records.
STR rates: Include furnished FF&E component. Unfurnished STRs would have lower reclassification rates closer to SFR benchmarks.
Cost basis: Uses RSMeans construction cost data and IRS Audit Techniques Guide classification methodology.

Individual results vary based on property-specific factors including age, condition, renovation history, geographic construction costs, and finish quality. These benchmarks are for informational purposes only and do not constitute tax advice.

Cost Segregation Benchmarks by Property Type