Can You Depreciate a Vacation Rental?

Yes — but personal use and the type of rental change the math.

Rental use is depreciable

If the property is rented out and held for income, the building portion is depreciable like any rental. Land is still excluded.

Personal-use days reduce it

If you also use the property personally, you generally allocate depreciation between rental and personal use. Heavy personal use can limit deductions under the vacation-home rules.

Short-term rentals can be different

Average stays of 7 days or less can make a rental a non-passive "business," which interacts with material participation and cost segregation — a powerful but nuanced area often called the STR loophole.

Frequently asked questions

Can I depreciate an Airbnb?

Yes, the building portion used for rental is depreciable; personal-use days reduce the deductible share.

What is the short-term rental loophole?

When average stays are 7 days or less and you materially participate, losses may be non-passive — often paired with cost segregation.

Sources

Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.

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