What role does depreciation play in the assessment of properties?

Depreciation plays a significant role in the assessment of properties by representing the reduction in value due to factors such as wear and tear, age, and obsolescence. Over time, properties can experience deterioration that diminishes their market value and functional utility. This reduction is important for assessing the current value of a property compared to its original value and affects the overall taxation and market attractiveness.

In property assessments, understanding depreciation helps assessors accurately estimate the value of a property, taking into account not just the present condition but also how physical and economic factors have impacted its worth over time. This allows for a fair and equitable assessment process, ensuring that property owners are taxed appropriately based on the current value of their property in its present condition.