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HR 173 · 119th CongressIn Committee
High Rise Fire Sprinkler Incentive Act of 2025
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
Sponsor
Nicole Malliotakis
Introduced
January 3, 2025
Latest action
January 3, 2025
Legislative Progress
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President
Enacted
Introduced
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House or Senate vote
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President
Sent to White House
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Latest Action
Referred to the House Committee on Ways and Means.
Plain-Language Summary
AI GeneratedUnder current tax law, building owners who install fire sprinkler systems must depreciate those systems over their useful life, typically 39 years for residential properties. This lengthy depreciation period means owners recover the cost of their investment slowly, reducing the immediate tax incentive to retrofit older buildings with modern fire safety equipment. High-rise residential buildings constructed before modern fire codes often lack automatic sprinkler systems, and the upfront capital cost combined with slow tax recovery discourages owners from making these safety upgrades.
The High Rise Fire Sprinkler Incentive Act of 2025 amends the Internal Revenue Code to reclassify automatic fire sprinkler system retrofits as 15-year property for depreciation purposes. The Internal Revenue Service will treat qualifying sprinkler installations—those meeting National Fire Protection Association standards and installed in residential buildings taller than 75 feet that were built before the retrofit—as depreciable over 15 years rather than 39 years. This accelerated depreciation schedule allows building owners to deduct the cost of retrofits more quickly, generating larger tax deductions in earlier years and improving the financial return on safety investments.
The change takes effect immediately upon enactment and requires no new federal funding or agency action beyond IRS implementation of the revised depreciation classification. Building owners undertaking sprinkler retrofits will begin claiming accelerated deductions on their tax returns in the year the system is placed in service. The faster cost recovery should increase the economic attractiveness of retrofitting older high-rise residential buildings, potentially spurring more widespread installation of fire suppression systems in buildings that currently lack them and reducing fire risk in aging urban housing stock.
Key Provisions
- 1Reclassify automatic fire sprinkler system retrofits installed in high-rise residential buildings as 15-year depreciable property instead of 39-year property under Internal Revenue Code Section 168.
- 2Define qualifying automatic fire sprinkler system retrofit property as systems meeting National Fire Protection Association 13 standards, installed in residential buildings over 75 feet tall that were placed in service before the retrofit.
- 3Apply the 15-year depreciation period using the straight-line method for tax purposes, allowing building owners to recover retrofit costs more rapidly than under current law.
- 4Establish a 39-year alternative depreciation system for taxpayers who elect the alternative depreciation system under Section 168(g) of the Internal Revenue Code.
★ Why this matters
Accelerated depreciation reduces the after-tax cost of installing fire sprinkler systems in older high-rise residential buildings, making retrofits more financially attractive to property owners. Faster tax deductions in the early years of ownership improve the return on investment and lower the payback period for safety upgrades. This financial incentive should increase the rate at which building owners retrofit aging residential towers with modern fire suppression equipment, potentially reducing fire-related injuries and deaths in buildings that currently lack automatic sprinkler protection.
● Who this affects
Building owners and operators of residential properties over 75 feet tall constructed before modern fire codes, particularly in urban areas where older high-rise apartment buildings are concentrated. Real estate investors and property management companies that own or manage aging residential towers will see improved economics on fire safety capital projects. Tenants in older high-rise residential buildings will benefit from increased likelihood of sprinkler system installation. The Internal Revenue Service will implement the new depreciation classification for affected taxpayers filing returns.
Bill Text
View on Congress.govShow / hide bill text preview
<DOC>
119th CONGRESS
1st Session
H. R. 173
To amend the Internal Revenue Code of 1986 to classify certain
automatic fire sprinkler system retrofits as 15-year property for
purposes of depreciation.
IN THE HOUSE OF REPRESENTATIVES
January 3, 2025
Ms. Malliotakis introduced the following bill; which was referred to
the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to classify certain
automatic fire sprinkler system retrofits as 15-year property for
purposes of depreciation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``High Rise Fire Sprinkler Incentive
Act of 2025''.
SEC. 2. CLASSIFICATION OF CERTAIN AUTOMATIC FIRE SPRINKLER SYSTEM
RETROFITS.
(a) Treatment as 15-Year Property.--Section 168(e)(3)(E) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of clause (vi), by striking the period at the end of clause (vii) and
inserting ``, and'', and by adding at the end the following:
``(viii) any automatic fire sprinkler
system retrofit property.''.
(b) Applicable Depreciation Method.--Section 168(b)(3) of such Code
is amended by adding at the end the following new subparagraph:
``(H) Any automatic fire sprinkler system retrofit
property.''.
(c) Alternative System.--The table contained in section
168(g)(3)(B) of such Code is amended by inserting after the item
relating to subparagraph (E)(vii) the following:
``(E)(viii)................................................ 39''.
(d) Definition of Automatic Fire Sprinkler System Retrofit
Property.--Section 168(i) of such Code is amended by adding at the end
the following new paragraph:
``(20) Automatic fire sprinkler system retrofit property.--
The term `automatic fire sprinkler system retrofit property'
means any sprinkler system which--
``(A) meets the standards of National Fire
Protection Association 13 (or any successor benchmark),
``(B) is installed for use in residential property,
and
``(C) is installed in a building which--
``(i) was placed in service before the date
of such installation, and
``(ii) has an occupiable floor more than 75
feet above the lowest level of fire department
vehicle access.''.
(e) Effective Date.--The amendments made by this section shall
apply after the date of enactment of this Act.
…Party Positions
8 members formally cosponsored
Democratic Party
✓
6 members formally endorsed
Cosponsored this bill
Source: cosponsors
Republican Party
✓
2 members formally endorsed
Cosponsored this bill
Source: cosponsors
Cosponsor data and vote records sourced from Congress.gov. Reflects formal legislative actions only.