How to depreciate fences, sidewalks, parking lots and landscaping on a rental property
Land itself cannot be depreciated, but improvements to it can. IRS Publication 946 lists land improvements such as fences, sidewalks, roads and landscaping with a 15-year recovery period, much shorter than the 27.5 years for a residential building. A $12,000 fence deducts $600 in the first year and $1,140 in the second.
What counts as a land improvement
A land improvement is something added to the land that wears out over time but is not part of the building itself. IRS Publication 946 groups land improvements, including sidewalks, roads, fences, bridges, landscaping and shrubbery, as 15-year property.
| Item | Usually treated as |
|---|---|
| New fence around the property | Land improvement, 15 years |
| New sidewalk or walkway | Land improvement, 15 years |
| Paving a new parking lot or driveway | Land improvement, 15 years (ask your preparer) |
| Planting new landscaping | Land improvement, 15 years |
| New roof, windows, plumbing | Part of the building, 27.5 years |
| Land itself | Not depreciable |
The land and the building each have their own value on the books. If you bought the property, the price has to be split first, as in allocating the purchase price between land and building.
A repair is not an improvement
Fixing part of an existing fence or patching a crack in the asphalt is a repair. You deduct it in the year you pay. Replacing the whole fence or repaving the whole lot is generally an improvement that you depreciate. The line between them is covered in repair or improvement.
IRS Publication 527 explains that you recover the cost of improvements by depreciating them, not by deducting them all at once. If an invoice mixes repair and replacement work, ask the contractor to split it, or split it yourself with a note.
How the 15 years work
Land improvements are generally depreciated under the general depreciation system, using 150 percent declining balance for 15-year property with a half-year convention in the usual case. You do not need to work out the method yourself. Publication 946 has a percentage table by year, and tax software applies it.
Example a made-up $12,000 fence is placed in service this year. The first-year rate for 15-year property in the half-year table is 5.00%, so the deduction is $600. The second-year rate is 9.50%, so the deduction is $1,140. Compare that with the same $12,000 on a 27.5-year schedule, which would give about $436 a year.
The date is the day the fence is ready for use, not the day you paid the invoice. Keep the final invoice and the completion date. A cost that qualifies as 15-year property may also qualify for bonus depreciation. See bonus depreciation for rentals and ask your preparer which election applies to you.
What changes when you sell
Depreciation you claimed on land improvements, like depreciation on the building, reduces your basis and can be taxed as depreciation recapture when you sell. The rules are in depreciation recapture when you sell a rental. That is not a reason to skip the deduction, since you are treated as having claimed the depreciation you were allowed whether or not you did. IRS Publication 551 explains basis.
Keep a simple asset list
- Open a fixed asset category called Land improvements, separate from Buildings.
- Record each project with its date placed in service, cost and a short description.
- Keep the invoices and, for a large project, photos before and after.
- Give your preparer the list each year. They calculate depreciation, and you update the list when something is replaced or sold.
How DoorKeeping handles it
In DoorKeeping, ask Claude or ChatGPT to read a contractor invoice and the assistant codes each line. A new fence or paving is not an ordinary repair, so check each line before you approve it and tell the assistant when a line is an improvement. Nothing posts until you approve it, and the books have no depreciation line, so the improvement goes to your preparer. Each property keeps its own books, so improvements stay with the right LLC. DoorKeeping gives no tax advice, and your preparer sets the depreciation.
Sources
- IRS, Publication 946, How To Depreciate Property, read Oct 30, 2026
- IRS, Publication 527, Residential Rental Property, read Oct 30, 2026
- IRS, Publication 551, Basis of Assets, read Oct 30, 2026
Questions
- Can I depreciate land?
- No. Land does not wear out, so it is not depreciable. Improvements on the land, such as a fence or paving, can be.
- How long do you depreciate a fence on a rental?
- Publication 946 lists fences as land improvements with a 15-year recovery period.
- Is replacing a parking lot a repair?
- Patching is a repair. Replacing the whole surface is generally an improvement that is depreciated. Ask your preparer about your facts.
- Is landscaping depreciable?
- New landscaping and shrubbery are listed as land improvements. Routine mowing and trimming are ordinary expenses.