From Cost Seg to Full Write-Offs: How BBB Transforms Commercial Property Investment
The commercial and multifamily real estate sectors just received a significant financial boost thanks to recent changes in federal tax law. Under the newly passed Build Back Better (BBB) Act, the 100% bonus depreciation provision has been fully reinstated for qualifying properties placed in service between January 20, 2025, and December 31, 2029.
With this reinstatement, real estate investors can immediately write off 100% of certain property costs in the first year of service, substantially improving cash flow and return on investment.
One of the most powerful tools to maximize this benefit is a cost segregation study. These engineering-based analyses identify and reclassify portions of a commercial or multifamily property, typically 30–40% of the total cost, into shorter-lived assets (such as personal property or land improvements). These assets qualify for accelerated depreciation, which now includes the full 100% bonus write-off.
Previously, bonus depreciation was being phased out, with only partial deductions allowed in coming years. The BBB Act reverses that trend for a defined window, giving property owners and developers a clear opportunity to act.
• Immediate Tax Savings: Up to 100% of reclassified asset costs deductible in year one • Improved Cash Flow: Retain more capital for reinvestment
• Incentive for Development: Encourages new construction and acquisitions
The reinstatement of 100% bonus depreciation under BBB presents a timely and valuable opportunity for those in commercial and multifamily real estate.
Through strategic use of cost segregation studies, investors can unlock significant upfront tax savings—making 2025–2029 a prime window for growth and development in the sector.
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The commercial and multifamily real estate sectors just received a significant financial boost thanks to recent changes in federal tax law. Under the newly passed Build Back Better (BBB) Act, the 100% bonus depreciation provision has been fully reinstated for qualifying properties placed in service between January 20, 2025, and December 31, 2029.
With this reinstatement, real estate investors can immediately write off 100% of certain property costs in the first year of service, substantially improving cash flow and return on investment.
One of the most powerful tools to maximize this benefit is a cost segregation study. These engineering-based analyses identify and reclassify portions of a commercial or multifamily property, typically 30–40% of the total cost, into shorter-lived assets (such as personal property or land improvements). These assets qualify for accelerated depreciation, which now includes the full 100% bonus write-off.
Previously, bonus depreciation was being phased out, with only partial deductions allowed in coming years. The BBB Act reverses that trend for a defined window, giving property owners and developers a clear opportunity to act.
• Immediate Tax Savings: Up to 100% of reclassified asset costs deductible in year one • Improved Cash Flow: Retain more capital for reinvestment
• Incentive for Development: Encourages new construction and acquisitions
The reinstatement of 100% bonus depreciation under BBB presents a timely and valuable opportunity for those in commercial and multifamily real estate.
Through strategic use of cost segregation studies, investors can unlock significant upfront tax savings—making 2025–2029 a prime window for growth and development in the sector.
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