Building Depreciation: What It Means and How It Affects Your Property Value

When you buy a building, it doesn’t keep its value forever. Over time, wear and tear, aging materials, and changing market needs reduce its worth—that’s building depreciation, the gradual loss of value in a property’s structure due to age, use, and obsolescence. It’s not damage you can fix with paint or repairs—it’s a natural, predictable drop built into every brick and beam. This isn’t just about numbers on a balance sheet. If you’re renting out a property or planning to sell, understanding building depreciation helps you plan for taxes, set realistic prices, and track your real return on investment.

Depreciation isn’t the same as market value swings. A property might go up in price because Mulund is growing, but the building itself? It’s still getting older. Think of it like a car: even if gas prices rise and used cars are in demand, your 10-year-old Honda still loses value each year. The same applies to apartments, shops, and offices. property value, the estimated worth of a real estate asset based on location, condition, and demand can rise, but building depreciation, the systematic reduction in the structural value of a built asset over time keeps ticking down. That’s why investors and landlords use it to reduce taxable income—by spreading the cost of the building over its useful life, you claim a yearly deduction. In India, this is allowed under income tax rules for residential and commercial properties.

It’s not just about tax breaks. Knowing how much your building has depreciated helps you decide when to renovate, when to sell, or whether to hold onto a property long-term. If your 15-year-old commercial space in Mulund has lost 40% of its structural value, but rent prices are climbing, you might be sitting on a goldmine—even if the walls are showing their age. On the flip side, if depreciation is eating into your equity and repairs are piling up, it might be time to rethink your strategy.

What you’ll find below are real examples and clear explanations about how depreciation works in practice—from how it’s calculated, to how it affects rental income, to why two identical buildings can depreciate at different rates. Whether you’re a first-time buyer, a landlord, or an investor in Mumbai’s busy market, these posts give you the facts without the fluff. No theory. No jargon. Just what you need to know to make smarter decisions with your property.