Save on your stay—reserve directly with us
If you own a short-term rental in the Texas Hill Country—whether it’s a modern retreat in Dripping Springs, a rustic escape in Wimberley, or a cozy hideaway in Driftwood—there’s a new federal law that could dramatically impact your vacation rental business in the best way possible.
Signed into law on July 4, 2025, President Trump’s One Big Beautiful Bill introduces sweeping tax changes that STR (short-term rental) owners can take advantage of starting this year. Whether you’re managing your first rental or operating a portfolio of Hill Country properties, the benefits could be substantial.
Before we dive in, a quick reminder: this article is for general informational purposes only. For financial decisions specific to your rental business, always consult a licensed tax professional.
One of the headline benefits of the new bill is the return of full bonus depreciation through 2029. This means you can immediately deduct the cost of qualifying property improvements, such as:
New furniture for your Wimberley cabin
Upgraded kitchen appliances in your Driftwood rental
Outdoor improvements like decks or fire pits in Dripping Springs
This makes it easier and more tax-efficient to reinvest in your property—improving guest experience and your bottom line.
💡 Pro tip: Ask your tax advisor about a cost segregation study to break out assets with shorter life spans that qualify for accelerated depreciation.
If you operate your rental as a business—through an LLC or S-Corp, for example—you may now permanently deduct up to 20% of your qualified rental income. This previously temporary deduction is now a permanent part of the tax code.
For professional hosts in the Hill Country, this means more money in your pocket each year, which can be reinvested into better amenities, marketing, or property expansion.
With lower tax obligations and faster write-offs, many STR owners will see an immediate improvement in cash flow. That extra income can go toward:
Expanding your property portfolio in high-demand areas like the Blanco River corridor
Hiring better cleaning or maintenance crews
Investing in amenities like hot tubs, EV chargers, or outdoor kitchens
Just remember: the full bonus depreciation benefit ends in 2029, so now is the time to plan those upgrades.
While these federal changes are great news, it’s just as important to stay compliant locally. Some Texas cities are tightening STR rules, especially as the market grows more competitive.
For Hill Country owners, that means staying in the loop with local ordinances in Wimberley, Dripping Springs, and Hays County. Be sure your property has the right permits, and keep up with changes on occupancy limits, noise ordinances, and license renewals.
The One Big Beautiful Bill has the potential to boost profitability and growth for vacation rental owners, especially those treating their properties like a business. With smart planning and guidance from a tax professional, you can make the most of:
Accelerated depreciation through 2029
Permanent 20% QBI deductions
Improved cash flow for reinvestment
Whether you’re looking to enhance a single rental in Driftwood or grow a full portfolio across the Hill Country, this new tax law gives you powerful tools to scale smarter.
Need help managing or optimizing your Hill Country rental? Hearth & Haven is here to support you—from revenue optimization to guest satisfaction. Let’s make 2025 your best year yet.
Wondering what your home could make as a vacation rental? Whether you’re a homeowner exploring short-term rental income, an investor analyzing returns, or a real estate agent advising clients, our expert team is here to help.
Request a Free Rental Evaluation
Optimized by Seraphinite Accelerator