New Construction Produces the Best Cost Segregation Results
of Any Property Type.
New construction typically identifies 18–24% of total construction cost as 5-year property and 8–14% as 15-year property — higher reclassification rates than most acquisitions. When you build from the ground up, every cost is documented. Every component is known. The study is ironclad because the records are already there.
Three Reasons New Builds Outperform Acquisitions in Every Cost Seg Category.
Complete Cost Documentation
Every trade contract, every purchase order, every change order is available. Our analysts use your actual construction documents — not estimates, not national averages. The resulting study is built on real numbers from your real project.
No Land Value Issue
In acquisition cost segregation, land must be excluded from the depreciable basis — requiring judgment that can be questioned. In new construction, the construction cost is 100% depreciable basis. No land allocation dispute. No IRS challenge.
Higher Reclassification Rates
New construction includes the latest technology infrastructure, modern specialty systems, and purpose-built improvements — all of which generate higher proportions of 5-year and 15-year property than older acquired buildings of the same type.
Three Property Types.
What New Construction Cost Segregation Finds.
Florida · 8,000 SF new build. Reclassified: $720,000. Year-1 savings @ 37%: $266,400.
Texas · 48-unit new build. Reclassified: $1,870,000. Year-1 savings @ 37%: $691,900.
Ohio · 50,000 SF new build. Reclassified: $1,080,000. Year-1 savings @ 37%: $399,600.
Start the Study Before Certificate of Occupancy. Capture 100% Bonus in Year One.
The best time to commission a cost segregation study on new construction is right before receiving the certificate of occupancy — before the property is placed in service on a tax return. This captures 100% bonus depreciation on all qualifying components in year one. If the return has already been filed, a Form 3115 catch-up can recover missed deductions — but bonus depreciation on the original components is governed by the rate in effect at the placed-in-service date.
Documents We Review
Architectural and engineering drawings · General contractor final cost breakdown · All trade subcontractor contracts and invoices · MEP specifications · Site work documentation · Change orders · Certificate of occupancy
Study Delivered at CO
The study is ready the moment the certificate of occupancy is issued. Not weeks later. For larger projects, we recommend engaging during construction to review documents as they are finalized.
100% Bonus Applied Year 1
Your CPA applies the 100% bonus depreciation election to all qualifying reclassified components. The entire identified amount is deducted in year one. On a $5M project, that can mean $900,000+ in year-one deductions alone.
The Best Cost Segregation Results Come From the Best Documentation.
New Construction Has Both.
Free analysis. 24-hour response. All 50 states. Projects at $250,000 and above. If we cannot find more in deductions than our fee — you owe us nothing.