Asset class 00.3 · 15-year property
Land improvements: the most under-claimed category in real estate
Land is not depreciable. The parking lot on top of it is. That distinction is worth more on a typical commercial property than every interior finish combined.
What a land improvement is
Depreciable improvements to land that are not buildings or structural components: paving, curbing, sidewalks, fencing, landscaping, irrigation, site lighting, drainage, retaining walls and site utilities. Asset class 00.3 assigns a 15-year GDS recovery period, 150% declining balance, and — critically — bonus eligibility.
Contrast that with the land itself, which is never depreciable, and with the building, which sits at 27.5 or 39 years. Land improvements occupy a middle ground that a lot of depreciation schedules never acknowledge, because the closing statement gave one number for the property and nobody separated the site work out of it.
Depreciable — 15 years
- 15Asphalt and concrete paving, base course, sealcoat
- 15Curbs, gutters, sidewalks, ADA ramps, wheel stops
- 15Site and parking lot lighting, poles, bases, bollards
- 15Landscaping, planting beds, sod, irrigation systems
- 15Fencing, gates, screening walls, retaining walls
- 15Storm sewers, catch basins, detention and retention
- 15Site utilities and trenching outside the building line
- 15Monument sign foundations, flagpoles, mailbox kiosks
- 15Patios, decks, pool decking, playgrounds, sport courts
- 15Docks, boat lifts and shoreline improvements
Not depreciable — land
- —The land itself
- —Original clearing and grubbing preparing raw land for its first use
- —General grading and fill inseparable from the land
- —Costs of acquiring the land, including title and survey attributable to it
- —Permanent easements and rights of way
The line between non-depreciable grading and depreciable site work is genuinely fact-specific. Grading directly associated with and necessary for a specific depreciable improvement generally follows that improvement. General site preparation does not.
Landscaping: the surprising part
Ornamental planting placed so close to a building that it would be destroyed if the building were replaced has been treated as following the building's life. Planting elsewhere on the site — perimeter trees, parking islands, buffer landscaping — is generally a 15-year land improvement. Irrigation systems are land improvements regardless of where they sit.
It is a small distinction with real money attached on properties with heavy landscape budgets: apartment communities, senior living, dealerships and campus-style office parks.
Why the category gets missed
Two reasons. On an acquisition, the buyer gets one purchase price and an appraisal that splits land from improvements — but not site improvements from the building. Everything that is not land goes on one line.
On construction, the schedule of values does separate site work, but the accounting entry frequently rolls total project cost into a single capitalized building asset anyway.
Either way the fix is the same: an engineering study that quantifies the site work, supported by takeoff or documented cost data, and — if prior years are involved — a Form 3115 to bring the correction forward.
No-cost feasibility review
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A feasibility review is free and takes about twenty minutes. Bring the closing statement and the depreciation schedule; we will tell you plainly whether a study pays for itself.