How Many Years Do You Depreciate a Commercial Roof?

Understanding Depreciation Rules for Roof Replacements in New Jersey

Commercial property owners in New Jersey often face a common financial conundrum: How many years do you depreciate a commercial roof? Whether you operate a commercial facility in Newark, Jersey City, or along the Shore, correctly calculating depreciation can have significant tax and accounting implications. The IRS guidelines, local building standards, and New Jersey-specific environmental considerations all play a role.

With Charles Jimerson of CJ Commercial Roofing NJ, let’s break down the fundamentals of roof depreciation, what it means for your bottom line, and how to make the most of your investment.

📊 What Is Depreciation—and Why Does It Matter?

Depreciation refers to the gradual deduction of the cost of a tangible asset—like a commercial roof—over its useful life. According to the Internal Revenue Service (IRS), commercial buildings and their structural components, such as roofing systems, must be depreciated over 39 years under the Modified Accelerated Cost Recovery System (MACRS).

This long depreciation schedule can catch some property owners by surprise, especially those used to shorter timelines for equipment or personal property. However, understanding how this works can help you plan long-term maintenance budgets, tax strategies, and investment returns.

🏢 Roofing as a Capital Improvement

If you replace or install a new commercial roof in New Jersey, that work is typically categorized as a capital improvement. This means you can’t deduct the entire cost in the year it’s incurred. Instead, you must capitalize and depreciate the expense over time.

For example:

You replace a roof in Hoboken for $120,000 in 2025.
Under MACRS, the cost must be spread out over 39 years, amounting to roughly $3,076.92 per year in depreciation deductions.

However, there are exceptions to the 39-year rule, especially when Section 179 or bonus depreciation is involved.

📌 Can You Accelerate Depreciation? (Section 179 & Bonus Depreciation)

Some building components qualify for accelerated depreciation under specific tax rules.

Section 179 Deduction
While roofs were traditionally excluded, the Tax Cuts and Jobs Act (TCJA) of 2017 allows nonresidential roofs to qualify for Section 179 expensing, provided:
- The total deduction doesn’t exceed the annual limit.
- The improvement is made to property already in service.
🏗️ For New Jersey business owners, this means that a new commercial roof on a property used in your trade (e.g., a warehouse in Trenton or a strip mall in Edison) may be fully deductible in the year it’s installed, up to the IRS limit (over $1 million in 2025).
Bonus Depreciation
Bonus depreciation allows for 100% immediate expensing of qualifying property in the year placed in service. However, this is being phased out:
- 80% in 202360% in 202440% in 202520% in 20260% by 2027 (unless extended)
Note: Bonus depreciation typically applies to personal property, not structural components. So, most commercial roofs will not qualify—but consult with a New Jersey tax professional to verify.

🏙️ Why Local Factors in New Jersey Matter

Depreciation may be federally standardized, but local roofing conditions and practices in New Jersey can affect the financial lifecycle of your commercial roof.

1. Climate & Roof Longevity

The humid subtropical climate in areas like Camden or Elizabeth means roofs must withstand freeze-thaw cycles, heavy snowfall, and summer storms.
This can reduce the practical lifespan of your roof, even if the IRS expects you to depreciate it over 39 years.

2. Roof Types Common in NJ

EPDM rubber roofs: Popular in Newark and Jersey City, with a useful life of 25–30 years.
TPO or PVC membranes: Often seen in newer commercial structures along the Turnpike corridor.
Built-up roofs (BUR): Still used in some older urban structures like those in Paterson.

While the IRS depreciation schedule doesn’t change, your maintenance and replacement planning should account for regional realities. For more, visit CJ Commercial Roofing NJ.

🛠️ Repairs vs. Replacements: Key Tax Distinction

The IRS draws a line between:

Repairs: Routine patching, minor leaks—can often be deducted immediately.
Replacements: Full roof overhauls—must be capitalized and depreciated.

For instance, if a Monmouth County property owner spends $5,000 on flashing and membrane patchwork, it may qualify as a deductible repair. But if the same property undergoes a $90,000 tear-off and reinstallation, it’s capitalized.

🧾 Example Depreciation Schedule for a NJ Commercial Roof

Year	Depreciation Deduction	Notes
2025	$3,076.92	Roof installed at $120,000
2026	$3,076.92	Straight-line MACRS
…	…	…
2063	$3,076.92	Final depreciation year

Important: Always align depreciation with your business use, ownership structure, and New Jersey property tax assessments.

🏛️ IRS vs. Practical Lifespan: Strategic Takeaways

Even though the IRS mandates a 39-year depreciation timeline, most roofs in New Jersey don’t last that long. So what does that mean for you?

Plan for Replacement Before Full Depreciation
Your roof may need replacing after 20–25 years, long before it’s fully depreciated.
Maintain Documentation
Maintain detailed cost breakdowns (materials vs. labor) and maintenance logs—especially for properties in urban zones like New Brunswick where code inspections are frequent.
Consult a Local Tax Expert
A CPA familiar with New Jersey commercial real estate can help navigate gray areas—especially when multiple improvements overlap in scope (HVAC, insulation, skylights, etc.).

📍 Depreciation Insights for New Jersey Commercial Property Owners

To summarize:

✅ Most commercial roofs must be depreciated over 39 years
✅ Section 179 may allow for faster expensing under qualifying circumstances
✅ Bonus depreciation has limited applicability for structural components
✅ Repairs can often be deducted immediately
✅ Real-world lifespans in New Jersey are often shorter than the IRS schedule
✅ Local codes and climate impact roofing decisions and planning
✅ Accurate cost allocation ensures compliance and tax efficiency

🤝 Final Thoughts: Maximize ROI by Playing the Long Game

In the high-cost, regulation-heavy environment of New Jersey real estate, knowing how many years to depreciate a commercial roof isn’t just about accounting—it’s about strategic planning. Whether you’re developing a logistics hub in Secaucus or renovating a medical office in Morristown, the roofing decisions you make today will shape your tax outcomes and asset value for decades.

Invest in quality roofing, keep up with maintenance, document everything, and use the depreciation rules to your advantage.