Land improvements: what counts, what does not, and why it is missed

The distinction

Land is never depreciable. Improvements to land are, over 15 years under asset class 00.3, using 150% declining balance, and they are bonus eligible.

That middle ground is where paving, curbing, sidewalks, site lighting, landscaping, irrigation, fencing, retaining walls, storm systems and site utilities live.

Why schedules miss it

On an acquisition, the buyer receives one purchase price and an appraisal splitting land from improvements — but not site improvements from the building. Everything not land goes on one line at 39 or 27.5 years.

On construction, the schedule of values does separate site work, but the accounting entry frequently rolls total project cost into a single capitalised building asset anyway.

The grading question

The genuinely difficult line. General clearing, grubbing and grading that prepares raw land for its first use is inseparable from the land and not depreciable. Grading directly associated with and necessary for a specific depreciable improvement generally follows that improvement.

In practice this means the excavation for a parking lot subgrade is treated differently from bulk site grading to establish finished elevations, and the distinction has to be documented rather than asserted.

Landscaping

Ornamental planting immediately adjacent to a building, placed so it would be destroyed if the building were replaced, has been treated as following the building's life. Planting elsewhere — perimeter trees, parking islands, buffer landscaping — is generally a 15-year land improvement. Irrigation systems are land improvements regardless of location.

Where it matters most

Retail centers, industrial sites with truck courts, self-storage, auto dealerships with display lots, garden-style apartments, and senior living with heavy site amenity. On these property types site work is regularly the single largest reclassified category — larger than everything inside the building combined.