Definition
A tax deduction allowing owners to recover the cost of income-producing property over a prescribed useful life.
Example
Residential rental property depreciates over 27.5 years; the land portion never depreciates.
Related terms
- Adjusted Basis
- Assessed Value
- Cost Segregation
- Depreciation Recapture
- Exchange Accommodation Titleholder
- Homestead Exemption
Frequently asked questions
What does Depreciation mean in real estate?
A tax deduction allowing owners to recover the cost of income-producing property over a prescribed useful life.
How is Depreciation used in practice?
Residential rental property depreciates over 27.5 years; the land portion never depreciates.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.