Rental Property Depreciation Calculator

Rental property depreciation spreads the cost of the building, not the land it sits on, across the years the structure is expected to remain in use. Land is excluded because it does not wear out over time, so only the building portion is depreciated. The building value divided by the depreciation period gives the annual deduction figure.

Only the building depreciates, so the land share is removed first. A property where the building is 80% of the value leaves 80% of the price to spread across the depreciation period; a higher land share leaves less. The larger the building portion and the shorter the period, the higher the annual figure.

Whether depreciation can be deducted, the period used, and how it is treated when a property is sold all depend on the tax rules where the property is located. Some jurisdictions allow the whole building to be written down; others restrict deductions to fixtures and fittings such as appliances and furniture. This calculator applies a straight-line method as a general illustration, with the depreciation period as an input you set to match the rules that apply. A qualified professional can confirm the treatment for a specific property.

A worked example

Take a property price of 300,000, a land value of 20%, and a depreciation period of 27.5 years. The building portion is 240,000, and dividing it across 27.5 years returns 8,727.27 a year. Adjust any input and the result updates as you type, with no submit button and no reload.

What moves the number most

The result responds to Property Price, Land Value %, and Depreciation Period (years).

The formula behind this

Building value = price × (1 - land %). Annual depreciation = building ÷ useful life years.

Where this fits in planning

This is a "what-if" tool, not a forecast. It helps to test ideas: what happens to the result as the Property Price or the Land Value % changes. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn’t capture

This is a simplified model that holds its assumptions constant. Real outcomes vary with market conditions, costs, taxes, and timing, so the figure is best read as one scenario rather than a forecast.