CalculateRealEstateROI

Taxes

How does rental property depreciation work?

Residential rental depreciates over 27.5 years straight-line on the building (not land) portion of basis.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Residential rental depreciates over 27.5 years straight-line on the building (not land) portion of basis.

Expanded explanation

Annual deduction = building basis ÷ 27.5. Typical: $300k property with $250k building basis = $9,090/yr deduction. Shelters cash flow from tax.

Examples

  • $250k building basis ÷ 27.5 = $9,090 annual depreciation.

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