- Furnished short-term rentals reclassify ~63% more depreciable basis than unfurnished single-family rentals. Median STR: 29.8% of basis to 5/7/15-year property. Median SFR: 18.3%. The gap is FF&E — furniture, appliances, fixtures, decor — all 5-year personal property under MACRS.
- Year-1 federal tax savings on a $500K STR: ~$43,695 (median, 37% bracket, 100% bonus). On the same $500K basis, an unfurnished SFR yields ~$25,740. A medical office produces ~$49,119. A condo: ~$13,543.
- US cost segregation pricing ranges from $495 to $15,000+ — a 30× spread — for the same IRS-compliant methodology. The variance reflects delivery method (automated remote vs. on-site engineering) and overhead, not report quality.
Cost segregation is a 25-year-old US tax strategy with a marketing problem. Every provider claims customers save "tens of thousands." Few publish numbers. Almost none publish data.
This report is the first open-data benchmark for the industry. We analyzed 412 cost segregation studies spanning 13 property types — from $285K urban condos to $8M garden-style apartment complexes — and published the median reclassification percentages, year-1 federal tax savings, and replacement-cost reconciliation factors. The dataset is licensed CC-BY 4.0: anyone can use, share, or republish with attribution.
Methodology
All 412 studies were generated using the Cost Seg Smart engine (version 2.2.0, calibrated 2026-03-14). The engine applies RSMeans 2026 construction cost data, MACRS classification per Rev. Proc. 87-56, and the methodology described in the IRS Cost Segregation Audit Techniques Guide (Pub 5653). Each study undergoes 16 automated quality-control checks before inclusion.
Property characteristics — square footage, year built, purchase price, location, structural features — are drawn from real US metropolitan property profiles representative of typical investor purchases at each property type.
Year-1 federal tax savings are computed as: (5-year basis + 7-year basis + 15-year basis) × bonus depreciation × federal marginal rate. We assume 100% bonus depreciation (current law under OBBBA) and the 37% federal marginal rate. State income tax is excluded for cross-state comparability.
The full methodology page includes engine version disclosures, sample composition, exclusion criteria, and limitations.
Reclassification Percentages by Property Type
The headline number for cost segregation is the reclassification percentage — what share of the depreciable basis (purchase price minus land value) gets moved from the default 27.5-year (residential) or 39-year (commercial) recovery period into shorter 5, 7, or 15-year MACRS classes.
| Property Type | n | Median Accel % | P25 | P75 | Median 5yr % | Median 15yr % |
|---|---|---|---|---|---|---|
| Single-Family Rental | 20 | 18.3% | 16.5% | 20.1% | 8.4% | 9.8% |
| Short-Term Rental | 20 | 29.8% | 28.6% | 36.2% | 19.2% | 10.9% |
| Duplex | 20 | 20.0% | 19.2% | 21.1% | 11.7% | 8.5% |
| Triplex | 20 | 19.1% | 18.3% | 20.0% | 11.2% | 7.7% |
| Fourplex | 20 | 19.6% | 19.1% | 20.0% | 11.9% | 7.4% |
| Condo | 20 | 14.4% | 14.0% | 14.6% | 13.5% | 0.9% |
| Multifamily 5+ Units | 22 | 17.2% | 16.7% | 17.5% | 9.8% | 7.2% |
| Office | 45 | 27.6% | 25.4% | 29.0% | 15.7% | 10.3% |
| Medical Office | 45 | 32.9% | 30.8% | 34.0% | 23.3% | 8.4% |
| Retail | 45 | 32.2% | 31.4% | 32.9% | 18.5% | 12.8% |
| Restaurant | 45 | 30.0% | 28.9% | 31.4% | 21.5% | 7.8% |
| Industrial | 45 | 20.4% | 19.6% | 23.6% | 6.3% | 13.4% |
| Mixed-Use | 45 | 26.2% | 25.3% | 27.9% | 14.5% | 10.4% |
Source: Cost Seg Smart Research, Benchmarks 2026. n = 412, with n=45 in every commercial property-type bucket (n=22 multifamily 5+, n=20 residential).
Year-1 Federal Tax Savings
Reclassification percentage matters, but what gets paid out is dollars. We computed year-1 federal tax savings for every study using 100% bonus depreciation (per OBBBA) and the 37% top federal marginal rate.
Year-1 savings normalized to $500K purchase price
| Property Type | Median Year-1 Savings ($500K basis) | Implied Effective Year-1 Deduction |
|---|---|---|
| Medical Office | $49,119 | ~$133K |
| Retail | $45,433 | ~$123K |
| Restaurant | $43,577 | ~$118K |
| Short-Term Rental | $43,695 | ~$118K |
| Office | $39,608 | ~$107K |
| Mixed-Use | $37,836 | ~$102K |
| Industrial | $33,462 | ~$90K |
| Duplex | $28,049 | ~$76K |
| Fourplex | $27,789 | ~$75K |
| Multifamily 5+ | $25,902 | ~$70K |
| Single-Family Rental | $25,740 | ~$70K |
| Triplex | $24,098 | ~$65K |
| Condo | $13,543 | ~$37K |
Pricing Across US Providers
| Tier | Typical Price | Turnaround | Site Visit |
|---|---|---|---|
| Automated remote | $495–$4,495 | Under 1 hr to 1 week | No |
| Mid-tier remote | $1,500–$5,000 | 1–4 weeks | Sometimes |
| Traditional engineering | $5,000–$15,000+ | 4–8 weeks | Yes |
For provider-by-provider scoring across these tiers, the third-party comparison at costsegregationreviews.com ranks 27 cost segregation providers on engineering basis, MACRS classification depth, and audit defense — independent from this dataset's methodology study.
Bonus Depreciation Context
The One Big Beautiful Bill Act (OBBBA), signed July 2025, permanently restored 100% bonus depreciation for property placed in service after 2024. The full reclassified basis can now be deducted in year one again — a 25–40% increase in year-1 deduction relative to the same study completed under the 2024 60% rate. For the full §168(k) phase-down history and OBBBA statutory mechanics, see the §168(k) bonus depreciation reference.
When Cost Segregation Doesn't Make Sense
The data above shows what cost segregation can produce. It doesn't say everyone should do one. Five scenarios where the math doesn't justify a study:
Properties under ~$200K basis
Year-1 savings scale with depreciable basis. Below ~$200K, even a $495 study often produces savings smaller than the study fee plus the time cost of CPA filing changes (Form 3115).
Low marginal tax bracket
Year-1 tax savings = accelerated basis × marginal rate. At a 12–22% bracket, the same study produces 30–65% less benefit than at the 37% bracket assumed in this dataset.
Passive losses you can't deploy
Most long-term rental owners can only use cost-seg losses against other passive income or via Real Estate Professional Status. Without REPS or passive income, the deduction carries forward but doesn't reduce your tax bill this year.
Properties you plan to sell within 2–3 years
Accelerated depreciation creates depreciation recapture on sale (taxed at up to 25%). Short hold periods can convert short-term cash benefit into a wash.
Properties already substantially depreciated
If you're past year 5 on a residential property and never did cost seg, a Form 3115 lookback can still recover missed depreciation. Past year 15–20, the remaining basis may not justify the study fee.
STRs you're about to convert to long-term
Cost segregation on a furnished STR captures FF&E in 5-year property. Convert to unfurnished long-term within 1–2 years and you may face partial-disposition recapture on the FF&E.
Studies that do make sense almost always have a few characteristics in common: depreciable basis > $250K, marginal tax bracket > 30%, ability to use the resulting losses (passive income, REPS, or material STR participation), and a hold period of 5+ years. If any of those are missing, talk to your CPA before ordering.
Frequently Asked Questions
What is the typical cost segregation reclassification percentage?
Does cost segregation trigger an IRS audit?
How much does a cost segregation study cost in the US?
How much can I save in year one with cost segregation?
What property types benefit most?
Does bonus depreciation still apply in 2026?
Can I use cost segregation on a property I bought years ago?
What's the difference between automated and traditional studies?
Why are some property types more variable than others?
Cite This Report
This report and dataset are released under Creative Commons Attribution 4.0 International (CC-BY 4.0). You may use, share, and adapt the contents for any purpose, including commercial, with attribution.
Cost Seg Smart Research. (2026). Cost Segregation Benchmarks 2026: What 412 Studies Tell Us About Reclassification, Savings, and Pricing. Cost Seg Smart. https://costsegsmart.com/research/benchmarks-2026/Download the Dataset
Open Data — Free to Use, Share, and Republish
The full per-study dataset (412 rows) and per-property-type aggregate summary are available below. Both are released under CC-BY 4.0.
Citation requests, data inquiries, methodology challenges: research@costsegsmart.com
Important. This report is for informational purposes only and does not constitute tax, legal, or accounting advice. Cost segregation outcomes depend on individual property characteristics, accounting elections, taxpayer circumstances, and applicable federal, state, and local law. Consult a qualified CPA or tax advisor before making decisions based on this data.