100 Percent Bonus Depreciation Is Back for Short Term Rentals: What Bay Area and Seattle Hosts Should Know

If you bought new furniture, appliances, or other big purchases for your Airbnb this year, we have some good news. The tax law passed in 2025, often called the One Big Beautiful Bill, brought back 100 percent bonus depreciation for qualifying property. That means the days of stretching those deductions out over five or seven years might be behind you. Here is what this actually means for hosts running properties in the Bay Area and Seattle, and how it is different from the cost segregation strategy we covered in an earlier post.

What Bonus Depreciation Actually Covers

Bonus depreciation applies to property with a useful life of 20 years or less under IRS rules. For most hosts that means furniture, appliances, mattresses, rugs, window treatments, outdoor furniture, and even things like a new fence, driveway, or landscaping. Instead of spreading that cost out over several years, you can deduct the full purchase price in the year you place the item in service.

Quick note before we go further. We are Airbnb hosts and co hosts, not tax professionals or accountants. Everything in this post is general information, not personal tax advice. Please run your specific numbers by your own CPA or accountant before you make any moves based on what you read here.

How This Differs From Our Cost Segregation Post

We wrote about cost segregation a few weeks back, and bonus depreciation is actually the tool that makes a cost segregation study pay off. A cost segregation study is what identifies which parts of your property qualify for shorter depreciation schedules in the first place, think cabinetry, certain electrical work, and land improvements. Bonus depreciation is what lets you take that whole deduction in year one instead of splitting it up over five, seven, or fifteen years. You do not need a full cost segregation study to benefit from bonus depreciation on furniture and appliances you bought this year. That part is simple on its own. A full study becomes worth the cost mainly for hosts who just purchased or renovated a property and want to accelerate a much bigger chunk of the building itself.

What This Means If You Are Furnishing or Renovating This Year

• If you are furnishing a new listing or refreshing an existing one before the fall and winter booking season, timing those purchases before December 31 could mean a meaningfully bigger deduction on this year's return.

• Keep every receipt and invoice. Your accountant will need documentation showing what was purchased, when it was placed in service, and that it was used for your rental activity.

• Bonus depreciation can create a loss on paper for your rental, and whether that loss can offset other income depends on things like real estate professional status. This is exactly the kind of detail your CPA needs to weigh in on before you file.

Between rules like this and Airbnb's own algorithm and policy changes, staying on top of what actually moves your bottom line can feel like a full time job on top of hosting. If you want a second set of eyes on whether your current setup, pricing, and expenses are working as hard as they could be, that is exactly what our rental evaluation consultation is for. We will walk through your numbers together and flag what is worth a closer look, including which purchases might be worth timing before year end. Book a rental evaluation consultation here.