Condo depreciation: the basics
A condominium rental depreciates over 27.5 years under MACRS, the same schedule as any residential rental. Your depreciable basis is the building portion of what you paid — purchase price plus acquisition closing costs, minus land value. For a stand-alone house the land is the dirt under the structure; for a condo, the land component is your proportionate share of the ground the entire building sits on, which means it is usually a smaller percentage of the purchase price than it would be for a single-family property.
Use the county tax assessor's land-to-improvement ratio as a starting point; if that ratio seems unreasonable, a qualified real-property appraisal will support a different allocation. The IRS accepts either method as long as it is well-documented.
Co-op apartment: shares, not real property
A cooperative apartment is different. You do not own real property — you own shares in a corporation that owns the building, with a proprietary lease entitling you to occupy a specific unit. When you rent the unit out, you can still claim depreciation, but you must determine what portion of your cost basis is attributable to the building itself rather than the land underneath it.
The co-op association typically has a depreciation schedule or can provide a statement of what fraction of the building's total depreciable value corresponds to your unit. You apply that fraction to your purchase price (minus the land allocation) to establish your depreciable basis. Depreciate over 27.5 years.
Common mistakes
Two errors trip up condo investors. First, failing to subtract a land component: even a 10th-floor condo has a land allocation — usually 10–20% of price in an urban high-rise but check your specific market. Second, using FMV appreciation as the basis: your depreciable basis is what you actually paid, not what the unit is worth today. Improvements you made after purchase add to basis; the market going up does not.
Frequently asked questions
What is the depreciation period for a condo rental?
27.5 years — the same as any residential rental property — using MACRS mid-month convention.
How do I find the land allocation for a condo?
Start with the county assessor's assessed land-to-building ratio. A property tax bill typically shows land and improvement values separately, and that ratio is the IRS's default.
Can I depreciate a co-op apartment?
Yes, but you depreciate your proportionate share of the building's depreciable cost (based on your unit's fraction of the whole building), not personal property you might own.
Sources
Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.