💡 Key Tax Benefits for STR Buyers
1 Restoration of 100% Bonus Depreciation
The legislation reinstates 100% bonus depreciation for qualifying assets placed in service between January 20, 2025, and December 31, 2029. This means STR investors can deduct the full cost of furnishings, appliances, renovations, and more in the year of purchase—creating massive first-year tax savings.
2. Permanent Qualified Business Income Deduction
The 20% Qualified Business Income (QBI) deduction for pass-through entities (like LLCs or S‑Corps) is now made permanent—providing a steady advantage for STR operators structured as small businesses.
3. Expanded SALT Deduction Cap
In high-tax states where property and income taxes can be burdensome, the State and Local Tax (SALT) deduction cap has been raised from $10,000 to $40,000—through 2030—providing real relief to investors.
📈 Why Timing Matters for STR Investments
- Accelerated Cash Flow: With most capital investments deductible upfront, investors see immediate tax relief—critical for improving year-one ROI and highlighting growth potential.
- Maximize Potential Before Changes Arrive: These benefits apply only to assets placed in service before the 2030 deadline (and some expire sooner). Now is the time to act.
- Combine with Good STR Fundamentals: Whether you’re planning to furnish aggressively, perform a cost segregation study, or actively manage bookings, the Bill rewards that structure—and strategically times your entry point.
How to Leverage the Short-Term Rental Tax Loophole to Reduce Your Tax Burden