Renovations & improvements

Renovation Depreciation Calculator (Real Estate)

Renovated a property? Those improvements are deductions. No perfect invoices needed: estimate your first-year value in 2 minutes.

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Use the calculator to estimate depreciation on renovations and improvements

Cost segregation calculator: Add your property details to calculate potential accelerated depreciation expense utilizing a cost segregation study.

Trusted by thousands of property owners

Not a replacement for your CPA. This calculator gives you a planning estimate. Your free proposal includes the engineered study your CPA files with confidence.

★★★★★

"Excellent experience with R.E. Cost Seg. The team was knowledgeable, responsive, and easy to work with throughout the entire process. They answered all my questions promptly and provided clear guidance every step of the way. I appreciate their professionalism and customer-focused approach and would recommend them to anyone considering a cost segregation study."

Tamara Sorokovska

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"Have used R.E. Cost Seg for 4 different cost seg studies and all have gone seamlessly, with a great product, at a great price. I appreciate the speed and efficiency, as well as the customer support. They make getting these done an easy and pleasant experience. Thanks!"

Jon Brenner

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"Completed a Rapid Report for our recently purchased rental property. Working with R.E. Cost Seg was a great experience.

The Rapid Report process was straightforward and easy to complete for a 2-1 rental. The team was professional, responsive, and excellent at communication throughout. Documentation provided went straight to my tax professional - no questions, not clarifications required. Highly recommend them."

Andrew Byers

How to use this renovation depreciation calculator

Enter purchase price, land value, and renovation cost (capital improvements).

Choose placed-in-service date, property type, and asset class.

Select bonus depreciation, tax rate, and tax filing year.

Understanding your results (No Study vs Baseline vs Optimal)

No Study

Standard depreciation.

Baseline

Planning-range estimate for potential acceleration.

Optimal

Planning-range estimate for potential acceleration.

Key outputs

Estimated Year 1 Tax Savings

An estimate of how much your taxes could drop in the first year based on additional depreciation deductions (using your selected tax rate).

Estimated Year 1 Accelerated Depreciation

The portion of first-year depreciation that's 'pulled forward' via cost segregation (and bonus depreciation, if selected), above what standard depreciation would typically produce.

Net Depreciation Increase

The difference between accelerated depreciation and standard ('no study') depreciation, showing the incremental deduction created by the cost seg approach.

Deductions 1st 5 years

A cumulative estimate of total depreciation deductions over the first five years under each scenario (standard vs accelerated ranges).

Depreciation Over Time

A longer-term view of how depreciation deductions are spread across future years, illustrating timing differences (more deductions earlier vs later), not necessarily a change in total depreciation over the full life.

With cost segregation

Standard depreciation

HighLow

Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10

What to include in “renovation cost”

Renovation cost should reflect capital improvements (major upgrades, additions, remodels), not routine repairs/maintenance.

Year 1 deduction · illustrative

front-loaded swing

Standard Accelerated (cost seg)

Frequently asked questions

Can renovation/improvement costs qualify for bonus depreciation, and under what conditions?

Potentially. When a cost segregation approach identifies portions of the renovation that are eligible for shorter-life assets (often 5-, 7-, or 15-year property), those components may qualify for bonus depreciation if bonus is available for the tax year and the assets meet eligibility rules. Not all renovation costs qualify; some remain 27.5- or 39-year building components.

What if I don’t have perfect invoices? Can I still estimate renovation cost for depreciation purposes?

You can still run an estimate using best-available records (settlement statements, contractor summaries, bank/credit card statements, scopes of work, before/after documentation). For actual tax filing, stronger documentation is better—so treat calculator results as directional until costs are validated.

How should I handle renovations completed after I bought the property? Do they depreciate differently from the purchase basis?

Improvements placed in service after acquisition are generally treated as separate capital additions with their own placed-in-service timing. The calculator’s “renovation cost” is meant to capture those capitalized additions so you can estimate the incremental depreciation impact (and any potential acceleration) attributable to the renovation.

Should my renovation cost include both labor and materials (and soft costs like permits/design)?

Yes, if the work is a capital improvement, include contractor labor, materials, and commonly capitalized soft costs (e.g., architecture/engineering, permits, project management) that are part of placing the improvement in service. Routine repairs and maintenance are typically excluded.