What Qualifies for 100% Bonus Depreciation in 2025? Find Out Now

At this point, you might’ve already heard about the One Big Beautiful Bill Act that was recently passed. The bill encompasses healthcare initiatives, tax reforms, and energy policies, spanning over 870 pages. However, if you’re an Airbnb investor, the most important aspect is the inclusion of 100% bonus depreciation and how it's being reinstated.

For anyone who has already purchased a rental or is looking to do so in 2025, the biggest question is definitely “what qualifies for 100% bonus depreciation in 2025?” Well, in this guide, we break it down. Find out how to qualify for bonus depreciation.

How Can A Property Qualify for 100% Bonus Depreciation in 2025?

The return of 100% bonus depreciation in 2025 has Airbnb hosts and short-term rental investors eager to take advantage of massive upfront tax deductions, but not all properties qualify automatically. To benefit, your property must meet specific IRS eligibility criteria.

The IRS has specific rules about what qualifies for bonus depreciation. Generally, you're looking at:

• Personal property: Appliances, furniture, fixtures, equipment
• Interior improvements: Flooring, lighting, electrical systems
• Exterior improvements: Landscaping, paving, site lighting
• Qualified Improvement Property (QIP): Certain interior building improvements
• Certain types of used property, as long as it’s new to you and you didn't inherit it or acquire it from a related party

All qualifying property components must have a Modified Accelerated Cost Recovery System (MACRS) period of 20 years or less.

Property Ownership Requirements and “Placed in Service” Timeline

You must own the property outright. While this seems obvious, it's more nuanced than you think. Properties held in LLCs, partnerships, or trusts can qualify. The key is having legal ownership through a qualifying entity. Joint ownership with spouses works perfectly fine. However, properties you're merely leasing or subletting typically aren’t allowed to claim bonus depreciation.

Your property must also be placed in service for business use to qualify for bonus depreciation. For existing properties converted to Airbnb use, the "placed in service" date is when you first made it available for rent. For new acquisitions, it's typically the purchase date or when you completed necessary improvements.

To qualify under the new permanent rules and claim the 100% bonus depreciation for 2025, these two requirements must be met:

1. Property must be placed in service after January 19, 2025
2. The binding acquisition contract must be signed on or after January 19, 2025

Properties acquired before this date follow the old phaseout rules (40% in 2025, 20% in 2026, 0% in 2027).

For used property, you must acquire it from an unrelated party. The previous owner cannot be:

1. A related party (family members, controlled entities)
2. A component member of a controlled group
3. Someone with whom you have certain relationships under tax code

Used property must also meet the "original use" test, meaning:

1. You cannot have used the property before acquiring it
2. The property must be new to your business operation
3. Previous business use by others is generally acceptable

What Airbnb Assets Qualify for 100% Bonus Depreciation?

Understanding which assets qualify for 100% bonus depreciation can make a significant difference in your tax savings. Here's what you need to know about the items that qualify for this newly reinstated benefit.

Furniture and Furnishings

Most of the furniture in your Airbnb property qualifies for bonus depreciation. This includes the basics like beds, mattresses, dining tables, chairs, sofas, and dressers. Coffee tables, nightstands, and office furniture also count.

The decorative items that make your space welcoming are included too. Artwork, mirrors, lamps, curtains, rugs, and even throw pillows qualify. These finishing touches might seem minor, but they add up to meaningful deductions.

Kitchen Equipment and Appliances

Kitchen appliances typically represent some of the highest-value qualifying assets. Refrigerators, stoves, dishwashers, microwaves, and washers and dryers all qualify for 100% bonus depreciation.

Smaller kitchen items can also count. Coffee makers, blenders, toasters, and cooking equipment can be depreciated. Don't forget about everyday items like dishes, cookware, and utensils, as they are legitimate business expenses as well.

Technology and Electronics

Today's guests expect modern amenities, and the technology you provide qualifies for depreciation. Smart TVs, streaming devices, WiFi equipment, and sound systems all count. Gaming consoles, tablets, and any computers provided for guest use also qualify.

Smart home devices like thermostats, lighting systems, security cameras, and smart locks fall into this category. These investments improve both guest experience and your property's security.

Outdoor Equipment

If your property has outdoor space, the furniture and equipment you provide there also qualify for depreciation. Patio sets, grills, fire pits, and outdoor heaters count. Hot tubs, pool equipment, and patio umbrellas also qualify.

Recreational items like bicycles, beach chairs, kayaks, or game tables can be depreciated if they're provided for guest use and stay with the property.

Linens and Soft Goods

All the linens and soft goods in your rental qualify for depreciation. Bed sheets, towels, comforters, and blankets are straightforward qualifying items. Shower curtains, bath mats, and even bathrobes count.

Decorative textiles like throw pillows, table linens, and area rugs also qualify. These items need regular replacement due to wear and tear, creating ongoing depreciation opportunities.

Business Equipment

The equipment you use to maintain and operate your Airbnb qualifies for depreciation. Vacuum cleaners, cleaning supplies, tools, and lawn equipment all count. Safety equipment and first aid supplies also qualify.

Your initial inventory of consumable items like toilet paper, soap, and welcome amenities can be depreciated when you first stock the property.

Property Improvements

Improvements completed after January 19, 2025, qualify for 100% bonus depreciation. This includes renovations, flooring replacement, HVAC upgrades, and electrical improvements.

Within larger renovation projects, certain components may qualify for accelerated depreciation. Built-in appliances, custom cabinetry, and specialized lighting systems often fall into shorter depreciation categories and can count towards your bonus depreciation.

What Doesn't Qualify for 100% Bonus Depreciation?

Land never qualifies for depreciation. This includes the land value portion of your property purchase, landscaping, driveways, and permanent outdoor structures. Only the depreciable structure and assets within it do. That’s where cost segregation can help break down the structure value into eligible components like cabinets, light fixtures, and built-ins into 5-, 7-, or 15-year categories that qualify for 100% bonus depreciation.

The cost segregation process requires detailed property inspections, construction cost analysis, and IRS-compliant documentation to properly separate items like specialized electrical systems, built-in appliances, and decorative elements from the building structure itself. Get started with DIY Cost Seg and save $50 using code BNBCALC.

Items you use personally also don't qualify for business depreciation. If you occasionally use furniture or equipment when staying at the property, only the business-use percentage can be depreciated.

Wrapping Things Up

Almost everything you buy for your Airbnb property, from major appliances to decorative accessories, can qualify for 100% bonus depreciation if purchased after January 19, 2025. The key is understanding the rules, keeping good records, and timing your purchases strategically.

Working with a tax professional who understands short-term rental properties can help ensure you're taking advantage of all available deductions while staying compliant with IRS requirements.