How much a cost segregation study costs for a rental home

For a single-family rental, condo or small multifamily property, a cost segregation study usually costs between a few hundred dollars and several thousand. Software-only reports sit at the bottom of that range, and engineered studies with a walkthrough and component-level cost estimates sit at the top. The fee matters less than two other questions: whether the study will hold up if the IRS asks about it, and whether you can use the deductions it produces.

What the market charges

Prices for residential studies fall into roughly three bands.

Type of study	Typical price level	How the property is assessed
Software-only report	A few hundred dollars	You answer questions online; a program applies percentages
Questionnaire plus engineer review	High hundreds to low thousands	Questionnaire, photos and closing documents, checked by an engineer
Engineered study	Roughly $2,000 to several thousand	Walkthrough (in person or by video), component quantities and unit costs

These are broad bands, and firms draw the lines differently. Some commercial-focused firms quote far higher numbers for a house because they run every job through the same process they use for an office building.

What drives the price

A few things move the fee for a home:

• Depreciable basis. A $1.5 million building has more components and more money riding on the classifications than a $250,000 house.
• Renovations. A large remodel means sorting invoices into the right buckets. A $150,000 kitchen, bath and deck project takes more work than a turnkey purchase.
• Number of units. A fourplex has four kitchens and four sets of flooring. An apartment building is a bigger job again.
• How the property gets inspected. Travel to a site costs money. A video walkthrough or a photo set costs much less.
• Look-back work. If the rental is already on a prior return, someone has to prepare Form 3115 and the catch-up calculation. Some firms include it and some charge extra.
• Deadline pressure. Rush delivery near the October extension deadline usually costs more.

Why commercial firms charge more for a house

Most large cost segregation firms built their process around warehouses, hotels and office buildings. Those jobs need site visits, detailed takeoffs from construction drawings, and a long report. When the same firm takes on a rental home, it often keeps the overhead. An engineer flies or drives out, spends half a day on site, and writes a report sized for a building with a hundred times the components.

Houses are repetitive. Nearly every one has flooring, cabinets, appliances, light fixtures, a driveway and some landscaping. A firm that only does residential work can price that repetition in. A higher fee does not by itself make a study more accurate or more defensible. The IRS Cost Segregation Audit Techniques Guide judges a study on its method and documentation, and price isn’t on the list.

Contingency fees are a red flag

Some providers offer to charge a percentage of your tax savings. Avoid this. The Audit Techniques Guide tells examiners to look more closely at studies paid on a contingency basis, because a firm paid by the size of the result has a reason to push classifications further than the facts support. A fixed fee, stated before work starts, removes that question.

What to ask any provider

Before you pay anyone, get answers to these:

1. Who reviews the study? Ask whether an engineer or cost estimator reviews each report, or whether software produces it with no human check.
2. Where does the land value come from? Land isn’t depreciable, so the land figure sets the ceiling on everything else. Ask whether they use county assessor data, an appraisal, or a number you supply, and how they document it. Our guide on setting land value covers the methods.
3. What does audit support cover? “Audit support” can mean anything from a phone call to written responses. Ask whether they will answer IRS questions about the study in writing, whether that costs extra, and who represents you (usually your CPA or attorney, not the study provider).
4. What do I get? You want a written report that explains the method and each classification, plus a fixed asset schedule your CPA can enter into tax software.
5. Is Form 3115 included? If you bought the rental in an earlier year, you’ll need it. See look-back studies and Form 3115.
6. What happens if my property doesn’t fit the study I ordered? You should hear that before you pay, not after.

FoxCostSeg pricing

We offer two studies, both at a fixed fee stated in your proposal.

The Express Study costs $895 and covers single-family homes, condos, townhouses and properties with up to four units, as long as the depreciable basis is $1.2 million or less, renovations are $80,000 or less, and each unit is 3,500 square feet or less. You fill out a questionnaire and send photos and your closing documents, and an engineer reviews the cost model. Delivery is about 5 business days.

The Engineered Study starts at $1,950 and covers anything outside those limits, including 5+ unit buildings and heavily renovated homes. It includes a 30 to 60 minute video walkthrough, which you or your property manager can do on a phone. Delivery is 15–20 business days, or 5 business days with rush delivery for an extra $500 when we have capacity.

If the rental is already on a prior return, the Form 3115 package is $450. Both studies include the report, an Excel asset schedule, and written answers to IRS questions about the study. Details are on the pricing page.

Fee versus first-year tax effect: three illustrations

These are illustrations, not client results. Each assumes the home was bought after January 19, 2025 and placed in service in July 2026, takes 100% bonus depreciation on the reclassified parts, and that the owner can use the losses this year. Without a study, the whole depreciable basis goes on a 27.5-year schedule, and July under the mid-month convention gives 5.5 months of depreciation in year one.

Item	Single-family home	Condo	Fourplex
Purchase price	$320,000	$450,000	$900,000
Land share	20%	10%	25%
Renovations	none	none	$120,000
Depreciable basis	$256,000	$405,000	$795,000
Share reclassified	30%	40%	30%
Reclassified to 5- and 15-year	$76,800	$162,000	$238,500
Year-1 depreciation without a study	$4,267	$6,750	$13,250
Year-1 depreciation with a study	$79,787	$166,050	$247,775
Extra year-1 deduction	$75,520	$159,300	$234,525
Federal tax effect at 24%	$18,125	$38,232	$56,286
Federal tax effect at 32%	$24,166	$50,976	$75,048
Study	Express, $895	Express, $895	Engineered, from $1,950

The fourplex needs the Engineered Study because its renovations exceed $80,000.

Here’s how the single-family numbers work. Without a study, $256,000 × 5.5 ÷ 12 ÷ 27.5 = $4,267. With a study, the $76,800 is deducted in full, and the remaining $179,200 of building gives $179,200 × 5.5 ÷ 12 ÷ 27.5 = $2,987. That’s $79,787 in year one, or $75,520 more than without the study. At a 32% bracket, $75,520 × 0.32 = $24,166. The $895 fee is under 4% of that figure.

Most of this is timing. You deduct now what you would otherwise deduct over 27.5 years, and some of it comes back as recapture when you sell. Our break-even guide runs the numbers over a full hold, and depreciation recapture explains the sale side.

What to do next

Put your purchase price, land value and renovation total into the calculator to see the first-year effect next to the fee. If the first-year effect clears the fee by a wide margin, request a free proposal. It tells you which study fits and the exact fee before you pay anything. The FAQ answers common questions about timing and documents.

This is general information, not tax advice. Your CPA should confirm how it applies to you.