Want to Keep More of Your Money This Year? Here’s How Real Estate Can Help
Investing October 24, 2025
Investing October 24, 2025
The real estate landscape has tilted back in favor of buyers and investors. Interest rates are easing, more inventory is opening up, and thanks to 100% bonus depreciation, there’s a major opportunity to buy property and use it strategically to reduce your tax burden. More specifically, bonus depreciation can help offset your taxable income. Whether you’re a W-2 earner with some cash to invest or a self-employed professional reinvesting business profits, accelerated tax deductions implemented earlier this year can help you keep more of your money while building long-term wealth.
Bonus depreciation is a tax incentive that allows investment property owners to deduct a percentage of qualifying property costs immediately in the year it is placed in service rather than depreciating those costs gradually over decades. For real estate investors, this means certain components of a property can be written off right away, dramatically reducing taxable income in year one. In 2025, the implementation of 100% bonus depreciation means you can claim the full deduction upfront on eligible assets.
You purchase a property for $500,000 and complete a cost segregation study that identifies $100,000 in assets (such as lighting, cabinetry, flooring, interior/exterior improvements, furniture, etc) eligible for bonus depreciation. You may be able to deduct $100,000 in the first year. If you’re in a 32% tax bracket, that could save you about $32,000 in taxes immediately. That’s $32,000 that stays in your business or investment account instead of going to the IRS.
Land doesn’t qualify, but land improvements (parking areas, landscaping, fencing, etc.) often do.
A cost-segregation study (breakdown of a property's components) is typically required to identify eligible components.
State tax rules differ
Depreciation recapture may apply when you sell the property, so long-term planning is key.
Between declining interest rates and renewed tax advantages, this may be the most strategic time in years to purchase real estate. Investors who move now can lock in better financing and take advantage of powerful tax incentives that may not last.
This does not constitute legal, tax, or financial advice. Always consult with a CPA or tax advisor for eligibility and guidance.
Her extensive 15+ year tenure as a full-time agent has seen her navigate the diverse and dynamic markets of Scottsdale, Arcadia, Paradise Valley, and other East Valley cities. Her hands on experience as a property owner and investor in these areas adds a unique perspective to her professional insights.