Published August 11 2026

The One Big Beautiful Bill & Orlando Vacation Homes: What 100% Bonus Depreciation Means for Buyers

Signed into law on July 4 2025, the One Big Beautiful Bill Act (OBBBA) — widely known simply as the “Big Beautiful Bill” — made the most significant changes to US real estate taxation in nearly a decade. For buyers of vacation homes and short-term rentals in the Disney corridor, one provision stands above the rest: 100% bonus depreciation is back, and this time it is permanent.

Below is a plain-English guide to what the bill changed, how it applies specifically to resort-area homes in communities such as Reunion Resort, ChampionsGate, Windsor Hills and Emerald Island, and what overseas buyers need to know. As always: we are real estate brokers, not tax advisers — confirm anything here with a qualified CPA before acting on it.

100% Bonus Depreciation Is Back — Permanently

Under the previous law, bonus depreciation was phasing out fast: 60% in 2024, 40% in 2025, and on course for 0% by 2027. The Big Beautiful Bill reversed that completely. For qualifying property acquired and placed in service after January 19 2025, buyers can once again write off 100% of eligible costs in the first year — and unlike the 2017 version, there is no scheduled sunset date.

The important nuance: bonus depreciation does not apply to the building itself, which still depreciates over 27.5 years. It applies to personal property and land improvements — and this is precisely where a fully furnished Orlando resort home shines. A cost segregation study on a typical vacation rental reclassifies roughly 20–30% of the purchase price into 5-, 7- and 15-year property: furniture packages, appliances, flooring, the pool deck, landscaping, fencing and paving. All of it now qualifies for an immediate 100% first-year deduction.

The Short-Term Rental “7-Day Rule”

Depreciation deductions are usually trapped as “passive losses” that can only offset rental income. Short-term rentals are the well-known exception. Where the average guest stay is 7 days or less — the norm in the Disney-area resort market — the property is not treated as a “rental activity” under the passive loss rules at all.

If the owner also materially participates (the most common test being 100+ hours per year, and more than anyone else — managing bookings, guest communication, pricing and turnovers), losses generated by bonus depreciation can offset ordinary income, including W-2 wages, without needing real estate professional status. This is why the strategy is often called the short-term rental loophole, and the Big Beautiful Bill just made it dramatically more valuable. Buyers using full-service third-party management typically will not meet the test — the losses are not lost, but they carry forward against rental income instead.

A Worked Example

Take an illustrative $550,000 fully furnished 5-bedroom pool home in a short-term-rental community near Disney. Excluding land value, the depreciable basis might be around $470,000. A cost segregation study reclassifying 28% into short-life property would produce roughly $130,000–$140,000 of first-year bonus depreciation. For a buyer in the 32% federal bracket who meets the material participation tests, that is potentially $40,000+ in first-year federal tax savings — on a property that also books Disney-driven guest demand year round. (Illustrative only; your figures will differ — model it with your CPA before you write an offer.)

One honest caveat: accelerated depreciation is a deferral, not a gift. Depreciation is recaptured when you sell — though a 1031 exchange, which the bill left fully intact, can defer that too.

The strategy works anywhere in the resort corridor, but the numbers pencil best where short-term rental zoning and guest demand are strongest: the resort communities of Kissimmee, Davenport and Clermont along the US-27 and I-4 corridor, and gated resorts such as Reunion Resort, all within 15–25 minutes of Disney.

The Other Wins for Vacation Home Buyers

SALT cap raised to $40,000. From 2025 through 2029 the state-and-local-tax deduction cap quadruples from $10,000 to $40,000 (rising 1% per year), phasing back down for incomes above $500,000. For buyers from high-tax states — New York, New Jersey, California, Illinois — who itemize, this frees up meaningful room, and Florida of course adds no state income tax of its own.

Mortgage interest deduction made permanent. The $750,000 acquisition-debt limit, due to expire at the end of 2025, is now permanent — and it covers a second home, which includes a vacation home used personally part of the year.

Mortgage insurance premiums deductible again. From tax year 2026, PMI on acquisition debt is treated as deductible mortgage interest — relevant to buyers financing with less than 20% down.

QBI deduction locked in. The 20% qualified business income deduction, which many STR owners claim on net rental profits, was made permanent rather than expiring after 2025.

What About UK and Other Overseas Buyers?

The headline benefits are not US-citizens-only. Overseas owners who file US returns on a net-income basis for their rental property claim depreciation the same way — including 100% bonus depreciation on cost-segregated short-life property — which can shelter US rental profits for years. The interaction with your home country's tax rules is a separate question (the UK, for example, calculates its own tax on the same income under its own rules), so cross-border buyers should take advice on both sides of the Atlantic. We have specialised in overseas ownership for over 20 years — our guide for UK owners of Orlando property covers the selling side, including FIRPTA.

Frequently Asked Questions

Disclaimer: Team Donovan, Inc. is a licensed Florida real estate brokerage. Nothing in this article constitutes tax, legal or financial advice. Tax outcomes depend on your individual circumstances — always consult a qualified CPA or tax adviser, and for cross-border buyers, an adviser in your home country, before making decisions based on the tax treatment described here.