Which term describes a percentage reduction in the remaining value of a property improvement?

The term that describes a percentage reduction in the remaining value of a property improvement is depreciation. Depreciation specifically refers to the decrease in value of an asset over time, often due to wear and tear, age, or changes in market demand. This concept is essential in property assessment, as it helps determine the current value of improvements based on their remaining useful life.

Obsolescence, although it can affect value, refers to a decline in value due to factors such as external influences (economic or environmental) or changes in design or technology that make a property less desirable. While both depreciation and obsolescence contribute to a property’s diminished value, depreciation captures the systematic reduction over time of the property improvement’s value specifically.

Value appreciation indicates an increase in value, which is the opposite of what is described in this context, and equity loss refers to a decrease in the owner’s financial interest in a property, typically due to debt or market conditions, rather than the specific reduction in the value of an improvement.