Claiming Depreciation for Tax Purposes

[Phineas Howie]

Somewhat confused here, how can a property appreciate,  yet one can claim depreciation for tax purposes. I heard Depreciation is a bigger factor for higher end property just how big is factor would it be for say a 350-400 thousand dollar home? 

[Natalie Kolodij]

Because real estate doesn't function the way most real property does. 

When the laws were set the IRS assumed any real property (computer, building, desk,)  would have a limited life. And a lot of the time, it's fairly true. 

A lot of cities are re-assessing the values in high market areas the the amount assigned to land vs. building is getting put much more toward land- because ultimately that's what's going up in value more. There's limited space in Seattle. People don't want this crappy house for $300k- they want the land and are going to tear down that crapy $300k house and build a $600k house on the land.