Tips and definitions: Vacation home purchase scenario
The value of the building refers to what the house costs.
That is, it is the property value minus the value of the land.
Typically, this is determined by using appraised values.
For example, if the price is $200,000 and
then the value of the building is (40,000/100,000)*200,000= $80,000
- if the building is appraised at $40,000. and the
- land is appraised at $60,000,
Note that the value of the building is subject to depreciation, while
that value of the land is not subject to depreciation.