The "High Rise Fire Sprinkler Incentive Act of 2025" incentivizes the installation of fire sprinkler systems in high-rise residential buildings by classifying these retrofits as 15-year property for depreciation purposes under the Internal Revenue Code. This reclassification aims to encourage building owners to invest in life-saving fire safety measures.
Nicole Malliotakis
Representative
NY-11
The "High Rise Fire Sprinkler Incentive Act of 2025" incentivizes the installation of automatic fire sprinkler systems in high-rise residential buildings by classifying these retrofits as 15-year property for depreciation purposes under the Internal Revenue Code. This classification allows for an accelerated depreciation method, providing a tax benefit for property owners who invest in these life-saving systems. The bill defines specific criteria for qualifying sprinkler systems, ensuring they meet established safety standards and are installed in buildings that pose unique challenges for fire safety. These buildings must have been in service before the installation date and have an occupiable floor more than 75 feet above the lowest level of fire department vehicle access.
Tax Break for Safer High-Rises: New Bill Offers Incentives for Fire Sprinkler Retrofits
The High Rise Fire Sprinkler Incentive Act of 2025 is all about making older, taller residential buildings safer by encouraging landlords to install modern fire sprinkler systems. It does this by offering a significant tax break.
Sprinkler Systems Get a Tax Upgrade
This bill changes the tax code (specifically, Section 168(e)(3)(E) of the Internal Revenue Code) to classify fire sprinkler retrofits as "15-year property." What does that mean in the real world? Normally, building improvements get depreciated – meaning their cost is deducted from taxes – over a long period, often 39 years. This bill shrinks that to 15 years for sprinkler systems. Building owners can deduct the cost much faster, giving them a bigger tax break sooner. It also calls out the depreciation method under Section 168(b)(3).
Real-World Impact: Faster Safety, Faster Tax Deductions
Imagine a building owner, Maria, who owns an older high-rise apartment building. She's been putting off installing sprinklers because of the cost. With this new law, she can deduct the full cost of the system in 15 years instead of 39. This could save her a significant amount on her taxes, making the upgrade much more affordable. For tenants like, say, a young family, this means a safer home, and that peace of mind is priceless. The bill goes into effect as soon as it is enacted.
Who Qualifies? The Fine Print
Not just any sprinkler system qualifies. The bill specifies that the system must meet the National Fire Protection Association 13 standards (SEC. 2 (B)(A)). The building has to be residential (SEC. 2 (B)(B)), and it needs to be tall – with at least one floor more than 75 feet above where a fire truck can access it (SEC. 2 (B)(C)(ii)). This focuses the incentive on those high-rise buildings where fire safety is a major concern. This part also clarifies that the building must have been in service before the installation date(SEC. 2 (B)(C)(i)).
Potential Challenges
While the bill aims for increased safety, there are some potential challenges. Could some building owners try to game the system, claiming the tax break for substandard installations? Or could some inflate the costs to maximize their deductions? It's crucial that there's oversight to ensure compliance and prevent abuse. This bill does not change or amend any existing fire codes. It is simply a tax incentive to get building owners to upgrade.