How Long Does the Depreciation Period Usually Last?

The depreciation period for a residential rental building is 27.5 years, and for a commercial (nonresidential) building it is 39 years. Property inside and around a rental recovers much faster: 5 years for appliances, carpet, and furniture used in the rental, 7 years for office furniture such as desks and file cabinets, and 15 years for land improvements such as fences, driveways, and shrubbery. Land itself is never depreciated. These periods come from the IRS's general depreciation system (GDS), which most landlords use, and bonus depreciation can shorten the personal property periods to a single year.

Recovery periods for common rental assets

The sources are Table 2-1 of IRS Publication 527 and the property classes in Publication 946. A building counts as residential rental property only if at least 80% of its gross rent comes from dwelling units. A building with ground-floor shops that bring in more than 20% of the rent is nonresidential and uses 39 years.

What do the method and convention mean for you?

Straight line gives the same deduction each full year: 1/27.5, or 3.636% of the building's depreciable basis (its cost or other starting tax value, adjusted under IRS rules and excluding land). Declining balance front-loads the deduction and switches to straight line once that gives a larger amount. You can elect straight line instead, but the election covers every asset in that class you place in service that year.

The convention sets how much of the first and last year you get, which is why each schedule spans more tax years than its label suggests:

• Mid-month (buildings): the building is treated as placed in service in the middle of its first month. A 27.5-year building is depreciated over 28 or 29 tax years, depending on the starting month.
• Half-year (most personal property): you get half a year of depreciation in the first year and in the last year, so 5-year property is deducted over 6 tax years.
• Mid-quarter: if eligible personal property and land improvements (such as fences and driveways) placed in service in the last 3 months of the tax year account for more than 40% of the total depreciable basis of all such property placed in service that year, each eligible item is treated as placed in service in the middle of its quarter instead. For this test, reduce basis for Section 179 deductions and personal use, but not bonus depreciation.

Example: furnishing a rental. You buy $4,000 of appliances and furniture for a rental and place them in service in May 2026. They are the only personal property or land improvements you place in service that year, and you elect out of bonus depreciation. Using 200% declining balance and the half-year convention, the deductions are:

If you are deciding what to buy for a furnished unit, whether to furnish your rental covers the rent and cost side.

When can you write things off faster than the recovery period?

Two rules often replace the 5-, 7-, and 15-year schedules with a first-year deduction:

• Bonus depreciation: Publication 946 says you must take a 100% special depreciation allowance for qualified property acquired and placed in service after January 19, 2025, unless you elect out. Qualified property includes tangible property with a recovery period of 20 years or less, so appliances, carpet, furniture, and fences qualify. Buildings and their structural components, at 27.5 or 39 years, do not.
• Section 179 and the de minimis safe harbor: the Section 179 deduction and the $2,500-per-item de minimis safe harbor covered in capital expenses versus repairs can also let you deduct some items in the year you buy them.

A longer schedule, the alternative depreciation system (ADS), is required in some cases: 30 years for residential rental buildings placed in service after 2017 and 9 years for appliances, carpet, and furniture. For example, a landlord who elects out of the business interest deduction limit as a real property trade or business must use the 30-year ADS period for the buildings. Most small landlords use GDS.

What happens if you sell, replace, or retire an asset early?

You stop depreciating an asset when you sell or exchange it, convert it to personal use, abandon it, or it is destroyed, even if its recovery period has not ended. Depreciation for the final year follows the same convention as the first year.

• Selling the building: you get depreciation for the months it was in service that year, counting the month of sale as half a month. In Publication 946's example, a building sold in March gets 2.5 months of depreciation for that year.
• Throwing out an old appliance: if you permanently discard a separately depreciated item, such as a refrigerator in year 3 of 5, you deduct its remaining undepreciated basis (its depreciable basis minus depreciation you took or were entitled to take) as a loss that year under the IRS disposition rules.
• Replacing a roof or other structural component: the old roof is part of the building, so replacing it is not automatically a disposition. You can make a partial disposition election by reporting the loss on your timely filed return (including extensions) for the year of the replacement. That lets you deduct the old roof's remaining basis instead of depreciating both the old roof and the new one for years. If you skip the election, the old roof's cost stays in the building's 27.5-year schedule.
• Converting a rental to personal use: depreciation stops on the date of the change.

When you sell, the depreciation you took (or were entitled to take) lowers your basis and increases your gain. The part of the gain on a building that comes from depreciation is taxed at up to 25%. For the step-by-step basis and first-year math, see how to calculate rental property depreciation.

For the rest of your rental write-offs, see what rental expenses you can deduct as a landlord.