Home Real Estate How’s the market? Land vs. improvements – Lake County Record-Bee

How’s the market? Land vs. improvements – Lake County Record-Bee

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When you buy real estate, the assessed valued is divided between the land and any improvements; improvements can include everything from houses and other structures to landscaping and septic systems, basically anything that isn’t bare land. Figuring out how best to divide the value between land and improvements is as much an art as it is a science, and sometimes it is in your best interest as a property owner not to accept the original allocation.

This is especially true for income property. Land is not depreciable, and depreciation can have a significant impact on your taxable income. Here’s how it works. When you purchase a rental property, the county assessor determines the land/improvement split. Ideally, the land value will be low, and the improvement value will be high. If the assessor says the land/improvement split is 40/60 but you’d rather it be 20/80, there are steps you can take to make that happen. Before I explain further, let’s…

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