Michigan Depreciation Calculator

Real estate depreciation lets you deduct the cost of a building over its useful life — 27.5 years for residential property. Pre-filled with Michigan median property value of $249,000.

Market

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Property Details

Property Type

Purchase Price

Land Percentage($49,800 land)

Capital Improvements

Tax & Timeline

Marginal Tax Rate

Years Held

Depreciation Schedule

$7,244$7,244 total

$7,244$14,487 total

$7,244$21,731 total

$7,244$28,975 total

$7,244$36,218 total

$7,244$43,462 total

$7,244$50,705 total

$7,244$57,949 total

$7,244$65,193 total

$7,244$72,436 total

$7,244$79,680 total

$7,244$86,924 total

$7,244$94,167 total

$7,244$101,411 total

$7,244$108,655 total

$7,244$115,898 total

$7,244$123,142 total

$7,244$130,385 total

$7,244$137,629 total

$7,244$144,873 total

$7,244$152,116 total

$7,244$159,360 total

$7,244$166,604 total

$7,244$173,847 total

$7,244$181,091 total

$7,244$188,335 total

$7,244$195,578 total

$3,622$199,200 total

Michigan Market Context

Avg Cap Rate

Median Price

$249K

Property Tax

1.13%

Vacancy Rate

6.8%

Local Factors

-Detroit and Grand Rapids are popular cash-flow markets for out-of-state investors
-Proposal A caps assessment increases at inflation rate for existing owners
-Wide variation between metro markets; rural areas face population decline

Sources

World Population Review – Median Home Price FL Probate Law – Property Tax Rates (ACS Data)The Hartford – Insurance Rates iPropertyManagement – Vacancy Rates

Annual Depreciation

$7,244

$604/mo

Modest Savings

Annual Tax Savings$1,738

Depreciable Basis$199,200

Building Value$199,200

Land Value$49,800

Useful Life27.5 years

Total Deductions Taken$7,244

Total Tax Savings$1,738

Years Remaining27 of 27.5

Land (Non-depreciable)$49,800

Depreciation Taken$7,244

Remaining Basis$191,956

What does this mean?

Your annual depreciation tax savings are modest. This is common for lower-value properties or when land makes up a large portion of the purchase price.

How Real Estate Depreciation Works

Depreciation is one of the most powerful tax benefits of owning rental property. The IRS allows you to deduct the cost of a building (not land) over its useful life — 27.5 years for residential and 39 years for commercial property.

This is called straight-line depreciation because you take equal deductions each year. It's a "paper loss" — your property might be appreciating while you claim it's losing value. That phantom expense offsets rental income and reduces your tax bill.

Keep running the numbers

One calculator rarely tells the whole story.

Depreciation is the silent return in Michigan. See how it compounds.

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