15-Year vs 27.5-Year vs 39-Year Depreciation: Which Applies to Your STR?
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A long-term rental building is depreciated over 27.5 years. A short-term rental often is not: because guests stay on a transient basis, many CPAs put the STR building on the 39-year nonresidential schedule instead. And an STR is not a single asset—it contains components with recovery periods from 5 to 39 years, and putting each one on the right schedule is worth thousands a year.
The Master MACRS Asset Class Table for STRs
Every depreciable asset in your STR falls into one of these categories. The recovery period determines how quickly you write off the cost—and which assets qualify for bonus depreciation.
| Asset Class | Recovery Period | Examples | Bonus Dep? |
|---|---|---|---|
| 00.11 / 00.12 (Personal Property) | 5 years | Furniture, appliances, carpets, electronics | Yes (100%) |
| 00.11 (Office Furniture/Fixtures) | 7 years | Certain equipment, office furniture | Yes (100%) |
| 00.3 (Land Improvements) | 15 years | Driveways, fencing, landscaping, outdoor lighting | Yes (100%) |
| Section 1250 (Residential) | 27.5 years | Long-term rental building structure | No |
| Section 1250 (Non-Residential) | 39 years | STR building rented on a transient basis; commercial buildings | No |
27.5-Year Property: Residential Rental
The 27.5-year recovery period applies to residential rental property—defined under IRC §168(e)(2)(A) as any building where 80% or more of the gross rental income is from dwelling units. The catch for STR owners is in the definition of a dwelling unit: it excludes a unit in a hotel, motel, or other establishment where more than half the units are used on a transient basis. A home rented mostly for 30 days or more is a dwelling unit and belongs on 27.5 years. A home rented mostly to short-stay guests often is not (see the 39-year section below).
Under the mid-month convention (IRC §168(d)(2)), depreciation starts in the month the property is placed in service, treating it as placed in service on the 15th of that month. This means if you placed your STR in service in October 2026, you get 2.5 months of depreciation in 2026 (October 15 through December 31).
27.5-Year Example
Long-Term RentalsSTR purchased for $520,000. Land allocated at 20% = $104,000. Building basis = $416,000.
Over 10-year hold: $151,270 total depreciation from building alone
Note: Furniture and improvements are depreciated separately at shorter lives
39-Year Property: Non-Residential Real Property
The 39-year schedule applies to nonresidential real property: any building that is not residential rental property. For STR owners it is often the right answer. A whole-home Airbnb or VRBO is a single unit, and when that unit is rented mostly to guests staying under 30 days it is used on a transient basis—so it falls outside the dwelling-unit definition, and the building is depreciated over 39 years straight-line with the mid-month convention. Many CPAs treat STR buildings this way, particularly after a cost segregation study.
39-Year Example
STR Rented on a Transient BasisSame $416,000 building basis as above, placed in service in September.
First year: 3.5 months under mid-month = $3,111
Final year: a partial year in year 40 picks up the remaining 8.5 months
The 39-year schedule gives a smaller annual deduction than 27.5 years ($10,667 vs $15,127 on the example above), but it is not a mistake—for a building rented mostly on a transient basis it is frequently the correct treatment. Practitioners do not all draw the line in the same place, so use the period your CPA puts on your return and keep your stay records to support it. Cost segregation matters more on a 39-year building: every dollar moved to 5-, 7- or 15-year property comes off the slowest schedule.
15-Year Property: Land Improvements
Land improvements are a frequently overlooked depreciation category for STR owners. Under MACRS asset class 00.3, land improvements have a 15-year recovery period and qualify for 100% bonus depreciation in 2026—meaning you can deduct them entirely in Year 1.
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15-Year Land Improvements
MACRS Class 00.3These are additions to the land that are separate from the building structure.
5-Year Property: Furniture, Appliances, and Personal Property
This is where a large portion of your STR deductions live. All furniture, appliances, carpets, and electronics are 5-year MACRS personal property. Combined with bonus depreciation, every dollar you spend on furnishing and equipping your STR can be fully deducted in Year 1.
The half-year convention applies to 5-year property: regardless of when during the year you place the asset in service, it is treated as placed in service on July 1 (unless the mid-quarter convention applies). This means you get one-half year of depreciation in Year 1 under standard MACRS—but with bonus depreciation, you get 100% regardless.
How STR Classification Affects Depreciation Period
Two different tests apply to an STR, and they are easy to confuse. The average-stay test (7 days or less, or 30 days or less with substantial services) decides whether the rental can escape passive-activity treatment. The depreciation period turns on whether the unit is used on a transient basis. They point the same way: the short stays that make a property an STR usually take the building off the 27.5-year residential schedule and put it on 39 years. A single-family home rented in 30-day-plus stays remains on 27.5 years; the same home rented in 3-day stays is commonly depreciated over 39.
Before finalizing your depreciation schedule, identify every asset you placed in service and assign it the correct MACRS class. Many STR owners lump everything into the building’s 27.5- or 39-year schedule when significant portions—furniture, appliances, improvements—should be on 5-year or 15-year schedules. This mistake costs thousands in annual deductions. See the full guide in our STR depreciation guide.
Year-1 Depreciation Comparison: $400,000 Building + $40,000 Furniture
| Asset | Basis | Recovery Period | Year 1 Depreciation |
|---|---|---|---|
| Building structure | $400,000 | 27.5 years | $6,667* |
| Land improvements | $25,000 | 15 years | $25,000 (bonus) |
| Furniture & appliances | $40,000 | 5 years | $40,000 (bonus) |
| Total Year 1 | $465,000 | $71,667 |
*Placed in service July 2026 (5.5 months under mid-month); 27.5-year schedule, no bonus on building. On the 39-year schedule, Year 1 on the building would be $4,701.
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Disclaimer
This article is for informational purposes and does not constitute tax, legal, or financial advice. Tax rules vary based on your specific situation, filing status, entity structure, and jurisdiction. Always consult a qualified CPA or tax professional for guidance on your specific tax situation. IRS rules and thresholds are subject to change—verify current requirements at irs.gov before filing.
Frequently Asked Questions
Is an Airbnb or VRBO rental depreciated over 27.5 or 39 years?
It depends on how the property is rented, not what it looks like. Residential rental property (27.5 years) must earn its rent from dwelling units, and the tax code excludes units used on a transient basis. A home rented mostly to short-stay guests is used on a transient basis, so many CPAs classify it as 39-year nonresidential real property. A home rented mostly for 30 days or more stays on 27.5 years. Practitioners differ at the margin, so match whatever your CPA puts on the return.
What is 15-year property in a short-term rental?
15-year property in an STR context includes land improvements: driveways, parking areas, fencing, landscaping, outdoor lighting, and similar improvements that are affixed to land but not structural components of the building. These are MACRS asset class 00.3 and qualify for bonus depreciation.
What is the MACRS recovery period for STR furniture and appliances?
Furniture and fixtures are 5-year MACRS property (asset class 00.11 or 00.12 depending on type). Appliances such as refrigerators, washers, dryers, and dishwashers are also 5-year MACRS property. Both qualify for bonus depreciation and Section 179 expensing.
How does STR classification affect which depreciation period applies?
Two separate tests are involved. The average-stay test (7 days or less, or 30 days or less with substantial services) decides whether the rental can avoid passive-activity treatment. The depreciation period turns on whether the unit is used on a transient basis: a home rented mostly for short stays is generally not residential rental property, so many CPAs depreciate the building over 39 years instead of 27.5. The same short stays that make it an STR usually put it on the 39-year schedule.