Rental capital improvements: lives and depreciation cheat sheet

By Tom, CPA · Updated October 27, 2026

Part of: Rental Property Taxes

TL;DR: Improvements to a residential rental are depreciated by asset type: building components such as roofs, HVAC, windows and plumbing over 27.5 years; land improvements such as fences, driveways and landscaping over 15 years; appliances, carpet and furniture over 5 years. Qualified improvement property (15 years) applies only to nonresidential buildings, not residential rentals. Bonus depreciation can apply to the 5- and 15-year items.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

Your tenant pays the mortgage; the IRS pays for the roof (eventually, over 27.5 years). This page is the cheat sheet for "eventually." Use it after you decide an expense is an improvement rather than a repair, then pick the right life.

Lives come from IRS Publication 946 (How To Depreciate Property) and Publication 527, Table 1-1 / Table 2-1 for residential rental property. Repair-versus-improvement rules come from the tangible property regulations.

CPA Warning Label: The roof is 27.5 years whether it lasts 20 or 40. The IRS assigns the life, not the shingle manufacturer.

27.5-year building components

Residential rental property is depreciated over 27.5 years, straight line, mid-month convention. Improvements to the building that are structural components get the same life, starting when placed in service:

• roof replacement;
• HVAC systems (furnace, central air, heat pump, ductwork);
• windows and exterior doors;
• plumbing (pipes, water heater as part of the system, fixtures in a remodel);
• electrical rewiring and panel upgrades;
• siding, insulation, foundation repair that is an improvement;
• kitchen and bath remodels (cabinets, counters, built-ins);
• additions, finished basements, new decks attached to the building;
• interior walls and flooring other than carpet (hardwood, tile).

Repair or improvement? Under Reg. 1.263(a)-3, you capitalize amounts that result in a betterment, restore the property or adapt it to a new use. Replacing a few shingles is a repair; replacing the roof is a restoration. The routine maintenance safe harbor, the de minimis safe harbor ($2,500 per invoice or item without an applicable financial statement) and the small taxpayer safe harbor (buildings with an unadjusted basis of $1 million or less, if annual repairs and improvements total no more than the lesser of $10,000 or 2% of the basis) can let some improvements be expensed.

15-year land improvements

Improvements to land, not the building, are 15-year property under Publication 946 (asset class 00.3), using the 150% declining balance method and the half-year convention (unless mid-quarter applies):

• fences;
• driveways, parking areas and sidewalks;
• landscaping and shrubbery;
• retaining walls;
• outdoor lighting not attached to the building;
• swimming pools (in-ground, generally);
• drainage and septic systems (treatment varies).

Land improvements are often bundled into a purchase price; a cost segregation study can separate them from the building so they depreciate faster. Land itself is never depreciated. Clearing and grading generally go into land basis unless directly tied to a depreciable improvement. See 15-year land improvements.

5-year appliances

Personal property used in residential rental activity is 5-year property (asset class 57.0) under Publication 527 Table 2-1:

• refrigerators, stoves, dishwashers, microwaves;
• washers and dryers;
• carpet;
• furniture (in furnished rentals);
• window blinds and drapes (generally).

These use 200% declining balance with the half-year convention, unless the mid-quarter convention applies. Office equipment and computers used in your rental business are also 5-year property; office furniture is 7-year property.

QIP and residential

Qualified improvement property (QIP) is a 15-year class with bonus depreciation eligibility. It applies to improvements to the interior portion of nonresidential real property. It does not apply to residential rental buildings such as single-family homes and apartment buildings. A kitchen remodel in a rental house is 27.5-year property, not QIP.

Bonus depreciation

Under the 2025 tax law, 100% bonus depreciation applies to qualified property acquired after Jan. 19, 2025, per IRS guidance as of Oct 2026. Five-, seven- and 15-year property qualifies; 27.5-year building improvements do not. The section 179 deduction is generally not available for property used in residential lodging, which includes most long-term residential rentals.

Old components

When you replace a building component, you can elect a partial asset disposition to write off the remaining basis of the old one.

Table

Illustration: Larry spends $40,000 in 2026 on a rental: $18,000 roof, $9,000 kitchen cabinets and counters, $5,000 appliances, $2,000 carpet, $6,000 new fence. Roof and kitchen ($27,000) over 27.5 years; about $982 a year in full years. Appliances and carpet ($7,000) and the fence ($6,000) qualify for 100% bonus: $13,000 deductible in 2026 if he does not elect out. See rental property deductions.

Using the cheat sheet

1. Decide repair or improvement first. Apply the betterment, restoration and adaptation tests, then the safe harbors. Only improvements go on this table.
2. Split invoices. A contractor invoice for a "kitchen" may include cabinets (27.5 years), appliances (5 years) and a repair to an existing floor (deductible). Ask for itemized bills.
3. Record the placed-in-service date for each item. Depreciation starts when the improvement is finished and the property is available for rent.
4. Consider elections. You can elect out of bonus depreciation by class each year if you would rather spread the deductions, for example when the loss would only be suspended under the passive rules.
5. Track for recapture. Bonus and accelerated depreciation on 5- and 15-year items is section 1245 recapture at ordinary rates when you sell. Building depreciation is unrecaptured section 1250 gain taxed at up to 25%. See capital gains stacking rules.

Common misclassifications

• Treating a new HVAC system as 5-year property (it is a building component).
• Depreciating a new roof as a repair because "it replaced the old one."
• Putting the cost of a driveway into the building's basis instead of 15-year property.
• Claiming QIP on a duplex interior remodel.
• Expensing a bathroom remodel as repairs because each invoice was under $2,500 (the de minimis safe harbor does not apply to parts of a larger improvement project).
• Forgetting to write off the old roof or HVAC that was replaced.