Unlocking Massive Tax Savings in Commercial Real Estate with Cost Segregation
As a business owner or investor in commercial real estate, imagine legally saving hundreds of thousands of dollars on your tax bill—instantly. Thanks to the powerful combination of Cost Segregation and the newly enacted One Big Beautiful Bill Act (OBBBA), those savings are not just possible—they're bigger and faster than ever before.
What’s New: OBBBA Supercharges Cost Segregation
Signed into law on July 4, 2025, the OBBBA permanently restores 100% bonus depreciation for qualifying assets placed in service on or after January 20, 202521. This means:
· Immediate expensing of short-life assets identified through cost segregation.
· Expanded eligibility for interior improvements, HVAC, lighting, parking lots, and more.
· Enhanced deductions for rural Opportunity Zones and low-income housing developments.
Why This Matters
Under previous law, bonus depreciation was phasing down—dropping to 40% in 2025. Now, with 100% bonus depreciation back, you can deduct the full cost of qualifying assets in year one, dramatically improving ROI and freeing up capital 2.
Example: Bigger, Faster Tax Savings
Let’s revisit our original example with the new OBBBA rules:
A taxpayer constructs a commercial building in 2025.
Through a cost segregation study, $500,000 of the total cost is classified as short-life assets.
With 100% bonus depreciation, the taxpayer deducts the full $500,000 in 2025.
Assuming a top federal tax bracket, the tax savings exceed $185,000 in the first year alone—a 60% increase over the previous law!
And that’s just the beginning. Over the first four years, total tax savings can exceed $250,000, with a present value of deferrals topping $175,000, assuming an 8% discount rate.
Who Benefits Most
· New construction placed in service after Jan 20, 2025
· Owner-occupied production facilities (manufacturing, refining, agriculture)
· Short-term rental owners with material participation
· Multifamily developers leveraging LIHTC credits
· Investors in Opportunity Zones, especially rural areas
How to Get Started
A Cost Segregation Study is essential to unlocking these benefits. The IRS requires a detailed engineering-based report—not estimates or guesswork. Partnering with experts ensures compliance and maximizes deductions.
Bottom Line:
The OBBBA has transformed the tax landscape for commercial real estate. Pairing it with cost segregation is like turning on a turbocharger for your tax strategy. Whether you're building, buying, or already own property, now is the time to act. Reach out to GranthamPoole today for a free consultation on how a cost segregation study under this new law could help your business thrive.
