OBBBA Timeline: The Dates Every Real Estate Investor Must Know

Bonus depreciation rates aren't a matter of when you bought the property — they're a matter of when it was placed in service. Under OBBBA, that distinction matters more than ever.

The OBBBA timeline

• ▸Pre-2018: No 100% bonus depreciation. Cost segregation still useful, but year-one impact limited.
• ▸2018–2022: 100% bonus under TCJA. Maximum-impact era.
• ▸2023: TCJA phase-down begins. 80% bonus.
• ▸2024: 60% bonus.
• ▸Jan 1, 2025 – Jan 19, 2025: 40% bonus (TCJA phase-down rate, still in effect for this short window).
• ▸Jan 20, 2025 and onward: 100% bonus, permanent (OBBBA).

The binding-contract trap

Here's the catch: if you had a binding written contract in place before January 20, 2025 to acquire the property (or to begin construction), you are stuck on the old 40% phase-down rate — even if you place the property in service in late 2025 or beyond.

This catches a lot of investors who signed PSAs in late 2024 and closed in spring 2025. The fix isn't always obvious; in some cases, contract amendments or restructured transactions can preserve the post-1/19/25 placement date for bonus purposes. Talk to a specialty-tax advisor before you assume.

What does 'placed in service' actually mean?

• ▸For income-producing real estate: when the property is ready and available for its intended use (typically the date the property is listed, rented, or operationally available — not the closing date).
• ▸For new construction: when the certificate of occupancy is issued and the property is operationally available.
• ▸For renovations/improvements: when the work is substantially complete and the asset is available for use.

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