How 100% Bonus Depreciation Is Reshaping Real Estate Investing in 2025
By Sean Ellman, REALTOR® — Pinellas County, Florida
If you invest in rental property — or you’re thinking about becoming an investor — 2025 delivers one of the strongest tax advantages we’ve seen in years. A major federal tax update restored 100% bonus depreciation for qualifying assets, but with very specific timing rules that every investor needs to understand.
🔑 The MOST Important Part: The Dates
To qualify for the newly restored 100% bonus depreciation, both of these must be true:
✔ You must have acquired the property on or after January 20, 2025
This means your binding purchase contract must be signed January 20, 2025 or later.
✔ You must place the property in service on or after January 20, 2025
A property is “placed in service” when it’s ready and available to produce rental income.
For example:
Closing is complete
Renovations you plan to use for bonus depreciation are finished
The property is ready for renters
❗If either the acquisition OR placed-in-service date is before January 20, 2025, you may fall under the lower phased-down bonus depreciation rules, not the restored 100% rate.
In simple terms:
100% bonus depreciation applies ONLY to properties acquired AND placed in service on or after January 20, 2025.
📆 Does the 100% Bonus Depreciation End?
As of now, there is no scheduled expiration date for the restored 100% bonus depreciation on qualifying property acquired and placed in service after January 19, 2025.
Older versions of the tax law had phase-outs.
This new update reverses that phase-down and restores full expensing indefinitely unless future legislation changes it.
What Bonus Depreciation Actually Is
Bonus depreciation allows investors to immediately deduct the full cost of many qualifying assets in the first year.
This does NOT apply to the building structure itself, but it does apply to many components that can be identified in a cost segregation study, such as:
Appliances
Flooring and interior finishes
Certain HVAC and electrical components
Cabinets
Land improvements (fencing, driveways, parking pads, landscaping)
Other personal-property-classified items
When bonus depreciation is at 100%, these costs can be written off right away instead of over 5, 7, or 15 years.
Why Investors Are Paying Attention in 2025
💰 Huge upfront deductions
Taking 100% bonus depreciation can significantly reduce your taxable income in the year you acquire and place the property in service.
💸 Better cash flow
Lower taxes mean more money to reinvest or pay down debt.
🏘 Helps new investors get started
Accelerated depreciation can turn a borderline deal into a profitable one.
🧾 Perfect for short-term rentals
Many short-term rentals qualify for even more favorable depreciation treatment if structured correctly.
🔧 Strong incentive for renovations
Upgrades completed after acquisition may also qualify.
What You Can & Can’t Depreciate
Eligible (often through cost segregation):
Appliances
Carpet and certain other flooring
Cabinets
Window treatments
Certain HVAC and plumbing components
Land improvements
Interior improvements that meet classification rules
Not Eligible:
The building’s structure
Land
Permanent structural elements that cannot be reclassified
Practical Timing Tips for Investors
1️⃣ Did you sign a purchase contract before January 20, 2025?
Signing earlier could disqualify you from the restored 100% rate.
2️⃣ Plan renovations carefully
If you want to bonus-depreciate improvements, they must be completed and placed in service after January 19, 2025.
3️⃣ Document everything
Keep:
Closing docs
Invoices
Placed-in-service dates
Renovation logs
This protects you if the IRS ever asks for evidence.
4️⃣ Work with a CPA familiar with real estate
And if you want the maximum deduction, a cost segregation study is often essential.
Bottom Line for Pinellas County Investors
Pinellas County continues to see strong rental demand, making 2025 and 2026 a prime year to expand or begin your investment portfolio. The restored 100% bonus depreciation—effective only for properties acquired and placed in service on or after January 20, 2025—is one of the most advantageous tax tools available to real estate investors today.
If you’d like to evaluate potential investment opportunities, explore neighborhoods, or chat more about investing in Pinellas County and the Tampa Bay area, I’m here to help.
Contact Me
Sean Ellman, REALTOR® — Pinellas County, FL
📞 727-717-0440
📧 SeanEllman@c21be.com
🌐 BuyTheSand.com
This blog provides general information and is not tax or legal advice. Consult a qualified CPA or tax attorney for guidance tailored to your situation.