What age is used for depreciation in appraisals?

• A. Effective age
• B. Actual age
• C. Replacement age
• D. Economic age

Answer: (A)

Depreciation in appraisals uses the property's effective age—the age assigned based on its condition, wear, and obsolescence, not simply how long it’s been since it was built. The effective age can be younger than the actual age if the property has been well maintained or updated, which reduces depreciation; conversely, a neglected or outdated property can have a higher effective age, increasing depreciation. This idea fits the age‑life approach, where depreciation reflects the gap between replacement cost and the value still available given the property’s effective age and remaining economic life. The actual age is just the calendar years since construction and doesn’t directly determine depreciation.