Is an Airbnb or VRBO rental depreciated over 27.5 or 39 years?

It depends on the property classification. If the property is a residential dwelling (single family, condo, townhouse) rented on a short-term basis, it is typically classified as 27.5-year residential rental property. If the property is classified as a hotel, motel, or transient lodging facility, it may be 39-year non-residential real property. Most individually owned STRs use 27.5-year.

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?

If your STR qualifies as a short-term rental (average guest stay of 7 days or less, or between 8-30 days with significant services provided), it is typically treated as an active business, not a passive rental. However, the building structure itself is still depreciated over 27.5 years as residential property regardless of STR status, as long as it is a residential dwelling unit.

April 6, 2026 · 8 min read

15-Year vs 27.5-Year vs 39-Year Depreciation: Which Applies to Your STR?

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Most short-term rental buildings are depreciated over 27.5 years as residential rental property under IRC §168(c) and Rev Proc 87-56. But an STR is not a single asset—it contains components with five different recovery periods, from 5-year furniture to 39-year structural elements, and using the wrong period costs you thousands in deductions every 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	Residential rental building structure	No
Section 1250 (Non-Residential)	39 years	Commercial/hotel building structure	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. For most individually owned STRs (single-family homes, condos, townhouses, cabins), this is the correct classification for the building structure.

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

Most STR Buildings

STR purchased for $520,000. Land allocated at 20% = $104,000. Building basis = $416,000.

Annual depreciation: $416,000 ÷ 27.5 = $15,127/year
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 non-residential real property. For STR operators, this is rarely the correct classification unless your property is structured as a hotel, motel, or transient lodging facility treated as a commercial operation. Most tax practitioners classify individually owned STRs as residential rental property.

Classification Warning

Some STR owners mistakenly use 39-year depreciation, costing themselves $4,727 per year in lost deductions on a $520,000 building (difference between $15,127 at 27.5 years and $10,590 at 39 years). Confirm your classification with your CPA based on the property's physical characteristics and IRS Revenue Ruling 67-297.

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.

15-Year Land Improvements

MACRS Class 00.3

These are additions to the land that are separate from the building structure.

Paved driveway Parking areas Fencing Retaining walls Landscaping Outdoor lighting Irrigation systems Swimming pools (above-ground)

Example: New gravel driveway ($8,500) + wood privacy fence ($4,200) + landscape grading ($3,100) = $15,800 of 15-year property. With bonus depreciation: $15,800 deducted in Year 1 instead of ~$1,053/year over 15 years.

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

There is an important nuance for STRs: even though your property may qualify as an STR for income tax treatment purposes (active vs. passive activity), the building structure's depreciation period is determined by its physical classification as a residential dwelling unit—not by how it's rented. A single-family home is 27.5-year property whether you rent it for 30-day stays or 3-day stays.

Pro Tip

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 27.5-year property 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.

Annual Depreciation Comparison: $500,000 Building + $40,000 Furniture

Asset	Basis	Recovery Period	Year 1 Depreciation
Building structure	$400,000	27.5 years	$6,061*
Land improvements	$25,000	15 years	$25,000 (bonus)
Furniture & appliances	$40,000	5 years	$40,000 (bonus)
Total Year 1	$465,000		$71,061

*Placed in service July 2026 (6.5 months); standard MACRS, no bonus on building.

Assign the Right MACRS Class to Every Asset

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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.