The private jet market has a new catalyst, and it arrived with a presidential signature. When the One Big Beautiful Bill Act became law on July 4, 2025, it restored 100% bonus depreciation for qualifying business property, including eligible aircraft acquired and placed in service after January 19, 2025. For corporate flight departments, charter operators, and closely held companies that had spent years watching the deduction shrink year by year, the change reopens a window that many assumed had closed for good. Businesses can again deduct the full qualifying cost of an aircraft in its first year of service rather than spreading those deductions across a decade of tax returns.
The timing matters as much as the substance. The restored allowance landed in an aircraft market already defined by strong demand, thin inventory in several popular categories, and manufacturer backlogs stretching years into the future. Honeywell’s October 2025 business aviation outlook singled out the tax change as a factor expected to encourage additional purchases, forecasting that new business jet deliveries would climb 5% in 2026 compared with 2025. On the pre-owned side, members of the International Aircraft Dealers Association reported 333 closed deals in the first quarter of 2026, up from 316 a year earlier. The deduction is not the only force moving this market, but it has given eligible buyers a concrete reason to reconsider both the timing and the structure of an acquisition.
Why 100% Bonus Depreciation Is Returning After Years of Phaseouts
Bonus depreciation allows a business to deduct a qualifying portion of an asset’s cost far sooner than ordinary depreciation schedules permit. For eligible aircraft, that portion can now cover the entire qualifying basis in the year the aircraft is placed in service, converting what would have been a multi-year tax benefit into an immediate one. It is worth being precise about what this is: a timing advantage for tax purposes, not a government rebate, not a subsidy, and not a reduction in the aircraft’s purchase price. Its real financial value depends on the buyer’s taxable income, overall tax position, financing arrangements, and ability to actually claim the deduction.
The incentive first gained prominence under the Tax Cuts and Jobs Act of 2017, which introduced 100% bonus depreciation for many qualifying assets. Under that original schedule, the allowance began declining after 2022, falling to 60% in 2024 and 40% in 2025. Had Congress done nothing, it would have dropped to 20% in 2026 before vanishing entirely in 2027. The One Big Beautiful Bill Act reversed that trajectory, restoring the full deduction for qualifying property acquired and placed in service after January 19, 2025.
The provision is widely described as permanent because the legislation establishes no scheduled phaseout. That gives businesses something they have not had in years: certainty when planning acquisitions beyond a single tax year, even though future Congresses could always amend the law. Buyers can generally also consider eligible used aircraft, subject to the applicable requirements, rather than being confined to factory-new jets. The result is a broader set of potential transactions across the business aviation market, from brand-new ultra-long-range flagships to late-model pre-owned aircraft sitting on dealer ramps.
Business Use and Delivery Timing Determine Who Qualifies
To claim bonus depreciation, an aircraft must satisfy applicable tax requirements, including qualifying business use and being placed in service within the relevant tax year. This is where many purchase plans go wrong. A signed purchase agreement, a deposit, or even full payment does not by itself establish that the aircraft is in service. The jet must be ready and available for its intended business use, and the buyer must maintain documentation supporting both the acquisition and how the aircraft is used.
Buyers also need to distinguish sharply between business travel and personal flying. Generally, the aircraft must be used more than 50% for qualified business purposes to qualify for the relevant accelerated depreciation treatment under the rules governing listed property. Personal trips, entertainment-related travel, and other nonqualifying uses can affect the calculation. If business use fails to clear the threshold, the buyer may be forced onto slower depreciation methods or face recapture of deductions if the aircraft’s use later falls below the required level. The precise outcome depends on the facts and the applicable provisions, which is why buyers should secure advice from a tax professional who knows business aviation specifically.
Operational planning becomes especially important when a purchase is scheduled near the end of a tax year. A company that orders an aircraft in November but cannot place it in service until the following year should not assume the purchase creates a deduction in the year the agreement was signed. Delivery, completion work, registration, crew readiness, and general operational preparation can all affect when the jet becomes genuinely available for its intended use. The rules can also differ by aircraft, transaction, and buyer circumstance. Certain aircraft may fall under special provisions, and taxpayers can make elections that change the amount or timing of depreciation. The IRS issued additional guidance in January 2026 concerning the restored allowance, and because a mistake can create a substantial tax liability, purchasers should coordinate with aviation counsel and qualified tax advisers before structuring a transaction around the deduction.
New Aircraft Demand Could Strengthen Further
The restored deduction arrived at a moment when manufacturers were already reporting sustained interest in business aircraft. Honeywell’s 2025 Global Business Aviation Outlook forecast 8,500 new business jet deliveries worldwide between 2025 and 2034, with a combined value of roughly $283 billion. The report anticipated average annual delivery growth of about 3% across the decade, projecting that 2026 deliveries would run 5% ahead of 2025. Surveyed operators specifically identified the return of 100% bonus depreciation as a factor likely to encourage additional purchases, a notable signal because it came from the people writing the checks.
Those projections should not be read as proof that tax law alone will produce higher deliveries. Fractional ownership, fleet replacement cycles, aircraft utilization, economic conditions, and the introduction of new models all shape demand. What bonus depreciation does is strengthen the case for replacing an aging aircraft or moving forward with a purchase a business had already been weighing. When the potential deduction is available immediately, the after-tax cost of acquiring an aircraft can look markedly more attractive than it did under a phased-down allowance.
The effect may be most visible among buyers with profitable operations and planned capital expenditures. A company expecting substantial taxable income can value the chance to accelerate a deduction into the current year, particularly when it faces a large one-off tax bill. Businesses with limited taxable income may not realize the same immediate benefit, and companies with loss carryforwards may find the deduction far less useful. Manufacturers, meanwhile, cannot simply accelerate deliveries because customers have a stronger tax incentive to buy. Existing order backlogs, supply chain constraints, and completion schedules limit how quickly new aircraft reach buyers. The law may influence when buyers commit, but delivery figures will also reflect how fast the industry can build.
Pre-Owned Jets Are Also Benefiting From the Incentive
The tax change is as relevant to the pre-owned market as it is to new aircraft orders. IADA members closed 333 pre-owned business aircraft deals in the first quarter of 2026, versus 316 during the same period in 2025, with the association describing the market as stable at elevated levels and demand continuing to outpace supply in several segments. Its reporting also flagged firm aircraft values and sustained buyer interest as defining features of the current environment, a combination that favors sellers and pushes buyers to move decisively.
Industry participants have cited bonus depreciation alongside stock-market performance as factors supporting transaction activity. Qualifying buyers may be able to acquire an eligible used jet and deduct its qualifying cost in the first year, provided the aircraft and transaction meet the applicable requirements. That expands the pool of attractive acquisition options for companies that do not need a factory-new aircraft or prefer to avoid the long wait for a new production slot.
Late-model aircraft carry particular appeal because they can offer modern avionics, contemporary cabin equipment, and relatively low utilization without the lead times attached to new deliveries. Strong demand for well-maintained aircraft, however, can also support asking prices and shrink the savings available to buyers. An accelerated deduction should therefore be evaluated alongside purchase price, maintenance history, upcoming inspections, engine programs, and expected resale value. The incentive may also shift seller behavior: owners who had been considering a sale could find a larger pool of motivated buyers, while prospective purchasers may compete for aircraft that meet their operational requirements. Tax policy remains only one component of market activity, and interest rates, financing access, corporate profitability, and the availability of suitable aircraft will continue to determine whether buyers complete deals.
The Deduction Does Not Eliminate Ownership Costs
A full first-year deduction can materially change a business aircraft’s after-tax economics, but it does not make the aircraft free. The purchaser must still fund the acquisition and cover recurring costs, including fuel, maintenance, insurance, hangar space, crew, training, and regulatory compliance. Financing expenses and the possibility of lower resale proceeds can further erode the investment’s overall return. Depreciation also concerns tax accounting rather than the aircraft’s actual market value. Deducting the purchase price does not mean the aircraft has lost its entire economic value during the first year, and conversely, a large deduction cannot protect an owner against a decline in market prices or an unexpected maintenance event such as a hot-section inspection or a $2 million engine overhaul.
Business use must remain documented long after the initial acquisition. If an aircraft’s use changes, the taxpayer may need to reassess eligibility and could face depreciation recapture under applicable rules. Companies that mix business travel with personal use should maintain accurate flight logs, passenger records, trip purposes, and supporting documentation that helps establish whether the claimed business use meets tax requirements. Those records become especially important if the deduction is examined years later, when memory fades and systems change.
Tax planning is also more complicated for aircraft used in charter operations, fractional ownership structures, or other arrangements involving multiple parties. The relevant rules can depend on ownership, operational control, lease terms, and how the aircraft generates income. A transaction that qualifies for one business may not produce the same result for another, and a structure that works for a single-aircraft owner-operator may fail for a managed fleet. Professional advice is essential before treating the deduction as a central justification for a purchase.
Tax Policy Could Pull Aircraft Purchases Forward
The return of 100% bonus depreciation gives qualifying business aircraft buyers a stronger incentive to accelerate acquisitions, and both industry forecasts and dealer reports suggest the change is contributing to an already active market. Its longer-term influence will depend on whether the incentive generates genuinely additional purchases or mainly shifts planned transactions into earlier tax years. That distinction will become clearer as 2026 delivery figures and pre-owned transaction data accumulate and analysts can separate real demand growth from pulled-forward buying.
If demand remains firm while manufacturers continue to face production constraints, buyers could encounter higher prices and longer waits even as the tax treatment becomes more favorable. The deduction changes the financial calculation, but it does not replace the need to assess whether an aircraft serves a genuine business purpose and whether its total ownership costs are justified. Businesses that plan carefully, verify eligibility, and compare the full cost of ownership with expected operational benefits will be best positioned to capture the deduction without letting a tax deadline dictate an uneconomic purchase.
