Built for Austin property owners — STR, MF, commercial

Austin cost segregation,
by the actual numbers.

Q: Does Austin's STR ordinance affect my cost segregation deduction?

No. IRS rules are federal; local ordinance affects operations, not depreciation. Your basis is your basis regardless of what Austin City Council does with type-2 short-term rental zoning. The federal Year-1 deduction sits on top of whatever your STR compliance status is.

Q: I have a homestead exemption on part of the property — does cost seg still work?

Yes, on the rental portion only. An engineer scopes the basis allocation between primary residence and rental — the rental portion gets full cost-seg treatment, the homestead portion doesn't qualify. Common for ADUs, garage conversions, and owner-occupied duplexes in East Austin.

Q: Travis County reassessed me. Does that change the cost-seg numbers?

No. Reassessments affect property tax (your local TCAD bill), not the IRS basis you use for federal depreciation. Your cost-seg basis is your acquisition cost from the closing disclosure plus any subsequent capital improvements — not the assessor's market value.

Q: I'm doing a 1031 from California to Austin. Can I cost seg the new property?

Yes — common play. The carry-over basis from the relinquished property plus any boot becomes the new basis. Cost seg can run on that basis. Your CPA has to coordinate the IRC §1031 deferral and §168(k) bonus depreciation properly; the cost-seg study sits on top of whatever basis lands.

Q: My East Austin property is in a zoning district fighting the new STR code. Does that matter for cost seg?

Operationally maybe, depreciation no — your basis is your basis. As long as the property is income-producing in the tax year, it qualifies for cost segregation. If the City eventually forces a use change, you may face recapture later, but that is a separate question.

Q: How does Austin compare to Nashville, Miami, or Denver for cost-seg ROI?

Austin is in the top quartile due to no state income tax plus event-driven FF&E density (SXSW, F1, ACL, UT). Nashville and Miami are similar. Denver is slightly lower because Colorado partially decouples from federal bonus depreciation. For Austin owners, the federal benefit is the whole benefit — clean, fast, no separate state schedule.

STR, multifamily, or commercial — most Austin owners save $40K–$180K in Year 1. See what it looks like for your property type, neighborhood, and tax year. 30-second estimate, no signup. Engineered studies start at $495.

Run my Austin estimate → See how it works

✓ 60-day money-back guarantee ✓ Engineer sign-off ✓ IRS ATG aligned

Reviewed by Cost Seg Smart Editorial Team · Last reviewed: May 2026 · Methodology: IRS Pub. 5653, Rev. Proc. 87-56, what is cost segregation?

Estimate (live) Updates as you type

Neighborhood

Property purchase price $600K

Property type

Estimated Year-1 federal savings

on $0 of accelerated deductions

Get the full study at costsegsmart.com → starting at $495

Estimate is illustrative. Final number is engineered to your specific property and reviewed by a licensed engineer.

$48,200

Median Year-1 federal savings for Austin owners over $500K basis — STR, MF, commercial blended (100% bonus, illustrative).

< 1 hr

Typical study turnaround at Cost Seg Smart.

$495

Studies start at $495. Most Austin properties land in the $795–$1,895 tier depending on basis and type.

If your Austin property — STR, multifamily, or commercial — is over $200K basis and held for 12+ months, you can run the full study at costsegsmart.com — typically delivered in under an hour, starting at $495. Order at Cost Seg Smart →

Why Austin is different

What pushes Austin STR savings higher than the national average.

National cost-seg calculators assume stable mid-market rentals. Austin STRs don’t behave that way — and four local factors push the math in your favor.

Event-driven FF&E density

SXSW, F1, ACL, UT football. Austin STRs need premium furnishings to command event-week rates — $30K–$60K of FF&E per property, all classified as 5-year personal property under MACRS. National calculators miss this.

No state income tax

Texas adds zero state-side complexity. Your federal benefit IS your benefit — no decoupling math, no state addback, no separate depreciation schedule. Cleanest STR cost seg in the country.

Pre-2023 build advantage

Most East Austin / Mueller / South Congress STRs were built or substantially renovated 2010–2019. That’s the sweet spot — modern systems (HVAC, electrical, finishes) classified as 5/7-year, not 27.5.

Material participation friendly

The 7-day average-stay rule fits Austin’s event-heavy STR pattern naturally. If you self-manage, you almost certainly clear the 100-hour bar. Active losses against W-2 income become reachable.

What it actually looks like

Three Austin properties, three property types.

Every number below is generated by our production cost-seg engine — the same engine that produces the engineered PDFs we ship to clients. Component allocations follow IRS Cost Segregation Audit Techniques Guide methodology with RSMeans 2024 cost basis. 2025 placed-in-service, 100% bonus depreciation under OBBBA, 37% federal bracket. Actual results vary with property age, condition, and basis allocation.

East Austin Airbnb craftsman bungalow at dusk with string lights and porch seating

East Austin · STR

These outputs come straight from our production engine — STR, fourplex, and office. To see one rendered as a full engineered PDF, browse a sample Austin report → at costsegsmart.com.

When the math doesn’t work

Two situations where we’ll tell you to skip it.

We won’t sell you a study that doesn’t pencil. Almost everything else — long-term holds, mid-term rentals, owner-occupied portion, recent renovations — typically does.

Property under $150K basis

The $495 study still produces a net benefit, but it’s small enough that it’s marginal — typically $3K–$5K Year-1 savings. Worth doing if you’re already filing the return; not worth a special trip.

Selling within 12 months without a 1031 exchange

Depreciation recapture on sale will eat most of the Year-1 acceleration. Wait, do the 1031, or hold longer.

Everything else — long-term holds, mid-term rentals, owner-occupied portion, conversion plays, recent renovations, multi-property portfolios — typically pencils.

How we calculate Austin numbers

RSMeans 2024 Austin construction multipliers + Travis County assessor data.

We use RSMeans 2024 cost data with Austin-specific regional multipliers, Travis County tax assessor records for land allocation, and the IRS Cost Segregation Audit Techniques Guide methodology. No site visit needed for residential or small-commercial under $5M. An engineer reviews and signs off on every report before delivery.

Full methodology details →

IRS ATG Aligned

Mirrors Publication 5653
RSMeans 2024

Engineering-grade component pricing
Engineer Sign-Off

Every study, no exceptions
60-day money-back

If your CPA can’t use the report

Questions

Austin-specific things people ask.

Does Austin’s STR ordinance affect my cost segregation deduction?

No — IRS rules are federal; local ordinance affects operations, not depreciation. Your basis is your basis regardless of what Austin City Council does with type-2 short-term rental zoning. The federal Year-1 deduction sits on top of whatever your STR compliance status is.

I have a homestead exemption on part of the property — does cost seg still work?

Yes, on the rental portion only. An engineer scopes the basis allocation between primary residence and rental — the rental portion gets full cost-seg treatment, the homestead portion doesn’t qualify. Common for ADUs, garage conversions, and owner-occupied duplexes in East Austin.

Travis County reassessed me. Does that change the cost-seg numbers?

No. Reassessments affect property tax (your local TCAD bill), not the IRS basis you use for federal depreciation. Your cost-seg basis is your acquisition cost (closing-disclosure number) plus any subsequent capital improvements — not the assessor’s market value.

I’m doing a 1031 from California to Austin. Can I cost seg the new property?

Yes — common play. The carry-over basis from the relinquished property plus any boot becomes the new basis. Cost seg can run on that basis. Your CPA has to coordinate the IRC §1031 deferral and §168(k) bonus depreciation properly; the cost-seg study sits on top of whatever basis lands.

My East Austin property is in a zoning district fighting the new STR code. Does that matter for cost seg?

Operationally maybe, depreciation no — your basis is your basis. As long as the property is income-producing in the tax year, it qualifies. If the City eventually forces a use change, you may face recapture later, but that’s a separate question from whether cost seg makes sense now.

How does Austin compare to Nashville, Miami, or Denver for cost-seg ROI?

Austin is in the top quartile due to no state income tax + event-driven FF&E density. Nashville and Miami are similar. Denver is slightly lower because Colorado partially decouples from federal bonus depreciation. For Austin owners, the federal benefit IS the whole benefit — clean, fast, no separate state schedule.

Have a question we didn’t cover? Email [email protected] or see the full FAQ at Cost Seg Smart →

Ready to see your number?

Order your Austin study —
under 1 hour, starting at $495.

STR, multifamily, or commercial — we generate the engineered PDF, an engineer signs off, your CPA files. Studies start at $495 for sub-$300K residential; most Austin properties land in the $795–$1,895 tier depending on basis and property type.

Order my study at costsegsmart.com → View sample Austin report

60-day money-back guarantee · CPA-Ready · Engineer signs every study

Austin cost segregation, by the actual numbers.