Property Depreciation Calculator
Key Takeaway
Building depreciation under Indian tax law is 10% per year for residential and 5% for commercial properties using the Written Down Value (WDV) method. Land values never depreciate as land has unlimited useful life.
Property Depreciation Calculator
Estimate architectural building depreciation values for taxation filing.
Valuation Summary
What to do next
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The Silent Value Killer
Real estate consists of two things: Land (which appreciates) and the Building (which depreciates). As a structure ages, its civil integrity weakens, requiring massive maintenance. A 30-year-old building is often valued merely at the cost of the land it sits on, minus the cost of demolishing the structure.
The 40-Year-Old Apartment: Sameer's Valuation Shock
He looks at new construction in the area selling for ₹30,000 per sq ft.
He assumes his flat is worth 2,000 × ₹30k = ₹6 Crores.
A valuer visits and prices it at just ₹3 Crores. Sameer is furious.
The valuer explains:
"Sir, you don't own the land individually, you only own a fractional share of the society's plot. Your physical apartment is 45 years old. The plumbing is rusting, the concrete is spalling, and the elevators are obsolete."
"The depreciation on a 45-year-old structure is nearly 80%. A buyer will have to spend ₹1 Crore just to gut and rebuild the interiors. They are only paying you for the location value, not the building." Sameer learned the hard way that buildings depreciate; only land appreciates.
Frequently Asked Questions
Can I claim depreciation on residential property in India?
No, under Indian tax laws, individuals cannot claim depreciation on a residential house property used for self-occupation or letting out. Depreciation is only allowed on properties used for business or profession.
How is building depreciation calculated?
For business properties, the Income Tax Act allows depreciation on the building component (not the land). The standard rate for commercial buildings is 10% per annum on the Written Down Value (WDV) method.
Does property value actually depreciate over time?
While land generally appreciates, the physical structure (building) depreciates due to wear and tear. Over decades, the cost of the structure becomes negligible, and the property's entire value is derived from the land.
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