Work out construction value depreciated instantly with clear inputs, formula shown and shareable results.
Valuers depreciate the structure but not the land, using straight line age-life depreciation on the amount above residual value. Remaining economic life is the figure lenders care about, because a loan term should not extend far beyond the useful life of the security.
Straight line depreciation
Annual = (cost - residual) / economic life
Depreciated value
Value = cost - annual x age, floored at residual value
Annual = (cost - residual) / economic life. Valuers depreciate the structure but not the land, using straight line age-life depreciation on the amount above residual value.
Even at the end of its economic life a building has salvage and site clearance value, and it usually remains habitable. Ten percent is a common convention for reinforced concrete construction.
This calculator takes 4 inputs: Original construction cost, Age of construction, Economic life, Residual value. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.