Land vs. Improvements: Where the Value Is Hiding
Your property tax assessment lands, and the number looks off. You open your property record card and see the total is split in two:
- Land value: $800,000
- Improvement value: $600,000
- Total assessed value: $1,400,000
The split matters. A lot.
When your assessment jumps, either the land value increased, the improvement value increased, or both. Your appeal strategy depends on which lever the assessor pulled. If the split is out of step with comparable properties, you may have a winning argument even when the total looks reasonable.
This guide shows what each piece means, how assessors typically build the numbers, red flags to look for, and how to turn the split into a focused appeal. (New to appeals? Start with our Appeal 101 guide to understand the fundamentals first.)
What "land" and "improvements" actually mean
Most owners think of a property as one thing. Assessors view two components.
| Component | What it includes | How it is valued |
|---|---|---|
| Land value | The lot itself, regardless of what is built on it | Lot size, location, zoning, topography, access, view, and comparable land sales |
| Improvement value | Everything built or attached: house, garage, deck, driveway, pool, shed, many site improvements | Depreciated replacement cost based on size, quality, condition, features, and permitted changes |
Basic formula
Total assessed value = Land value + Improvement value
Why the split exists
In the cost approach, land is not depreciated while improvements are. Many assessors maintain a separate land and improvement schedule for modeling and statutory reporting. Different valuation methods may apply to each component depending on available market data.
Note: Land prices can rise or fall with market conditions. "Land does not depreciate" refers to the cost approach convention, not a guarantee that land values never decline. This is a common myth many homeowners hold.
Why the split matters for an appeal
Owners often compare only total assessed value. The land versus improvement breakout reveals where to push, what evidence to gather, and which legal standards to cite.
Scenario 1: The land value spiked
Last year your assessment showed land at $600,000 and improvements at $800,000 for a total of $1,400,000. This year the land jumped to $850,000 while improvements stayed at $800,000, bringing the total to $1,650,000. Land rose about 42 percent while improvements stayed flat—the assessor is signaling higher site values.
To challenge this, pull nearby parcels with similar lot size, location, and zoning and compare land dollars per square foot. Check for negatives that warrant adjustments: slope, irregular shape, easements, flood risk, traffic noise, access limits. Look for recent vacant lot sales. If none exist, be extra critical of any back-of-the-envelope land allocations. For more on finding and using comparable sales effectively, see our dedicated guide.
If neighbors with similar lots did not see a comparable land increase, argue inequity and methodology inconsistency.
Scenario 2: The improvement value spiked
Last year your property was valued at Land $800,000, Improvements $600,000, Total $1,400,000. This year it jumped to Land $800,000, Improvements $850,000, Total $1,650,000. While land stayed flat, improvements rose about 42 percent. The assessor either believes the structure is worth much more now or is correcting prior under-valuation.
Start by verifying the underlying data. Look for phantom square footage, inflated quality grades, or features that do not exist. These are common errors assessors actually care about correcting when you present solid proof. Compare improvement values against similar homes with comparable year built, effective age, quality, and living area. If your property has deferred maintenance, document it to support higher depreciation. Large improvement jumps without permits or visible upgrades are especially ripe for challenge.
Scenario 3: Same total, very different split
Your parcel: Land $900,000 (60 percent), Improvements $600,000 (40 percent), Total $1,500,000. Comp parcel: Land $600,000 (40 percent), Improvements $900,000 (60 percent), Total $1,500,000.
Totals match but allocations diverge. This may be justified by lot premium or building quality. If not, it signals an allocation error that can reduce your total.
If lot size, location, and utility are similar, argue for lower land allocation to align with peers. Alternatively, show that the building valuation better fits market evidence and that the land should carry less weight.
How assessors typically value land
| Method | Description | Common Pitfalls | Your Move |
|---|---|---|---|
| Comparable land sales | Use recent vacant lot sales to derive site value. | Using sales from superior or inferior locations without adjustments. Ignoring lot peculiarities like shape, slope, wetlands, or easements. Relying on stale sales when the market shifted. Thin data that forces rough allocation. | Find closer matches, quantify negatives, and anchor on $ per sq ft comparisons. |
| Abstraction or extraction | When vacant lot sales are scarce, subtract depreciated improvement cost from sale price of comparable improved properties to infer land value. | Overstated or understated improvement costs. Weak or non-comparable sale selections. Market timing issues. | Swap in better comps and defend a more credible depreciation and cost schedule. |
| Allocation by neighborhood percentage | Some jurisdictions apply typical land-to-total ratios for an area. | One-size-fits-all ignores lot size extremes and unique attributes like view or waterfront. Ratios lag market turns. | Demonstrate why your parcel deviates from the neighborhood norm. |
How assessors typically value improvements
Improvement value often follows depreciated replacement cost.
Improvement value = Replacement cost new − Depreciation
Replacement cost new
Based on cost per square foot tables by quality class, multiplied by living area and adjusted for features and finishes.
Depreciation drivers
Effective age reflects actual condition rather than calendar age. Economic life varies by quality and market, commonly several decades. Depreciation schedule reduces value annually and can include physical, functional, and external obsolescence.
Worked example
A 2,500 sq ft home with replacement cost $200 per sq ft gives $500,000. Effective age 30 years and economic life 60 years. Depreciation 30 ÷ 60 equals 50 percent. Depreciated improvement value about $250,000.
Common pitfalls
Cost tables that assume a higher quality grade than reality. Missed deferred maintenance. Underestimated effective age due to wear and outdated systems.
Your move
Document condition with photos, contractor estimates, and peer comparisons to support more depreciation or lower cost assumptions.
Red flags worth a second look
| Red flag | What to check | Why it matters |
|---|---|---|
| Land value increased 10 percent or more year over year | Did similar lots move the same amount and are there land sales to support it | Big jumps need market support |
| Land allocation exceeds 60 percent of total | Is there a view, waterfront, corner exposure, or unusually large lot | High land share requires clear justification |
| Improvement value rose without permits or upgrades | Property record errors, incorrect square footage, or quality grade drift | Unexplained changes are appealable |
| Your land or improvement allocation differs from neighbors | Pull 3 to 5 comps and compare splits | Inconsistent methodology supports an equity appeal |
| Land $ per sq ft is far above recent lot sales | Calculate and compare | Overstated land is common when sales are thin |
| Implied improvement $ per sq ft looks unrealistic | Divide improvement value by living area and compare to local build costs | A mismatch signals cost or depreciation error |
Real-world style examples
Example 1: Correcting an overcooked land value
Situation
A San Mateo County owner saw land jump from $1,200,000 to $1,600,000 in one year while improvements stayed at $800,000.
Evidence
Neighborhood lots of similar size were assessed at about $200 per sq ft while her lot penciled to $267 per sq ft. No premium features.
Outcome
After presenting a comparison table, photos, and a request to align with peers, the county reduced land to $1,200,000. Total fell from $2,400,000 to $2,000,000. At a 1.3 percent tax rate, estimated annual savings were about $5,200.
Example 2: Winning with depreciation and condition
Situation
A Dallas owner’s improvement value was $900,000 on a 3,000 sq ft, 50-year-old home, implying $300 per sq ft despite dated systems.
Evidence and argument
Replacement cost should reflect a non-premium quality at roughly $250 per sq ft. Effective age higher due to deferred maintenance. Documented roof wear, older HVAC, and outdated kitchen and baths. Peer comparisons supported a lower improvement number.
Outcome
County reduced improvements to $600,000. Total dropped from $1,400,000 to $1,100,000. At a 2.3 percent rate, estimated savings were about $6,900 per year.
Note: Figures are illustrative. Markets vary widely. Always anchor to current local data.
Build your appeal around the split
If land is the problem
- Gather recent vacant lot sales or the best proxies you can find.
- Compute land $ per sq ft for your parcel and for comps.
- Document negatives: slope, easements, flood maps, traffic, utility constraints.
- Compare your land allocation with 3 to 5 neighbors.
- Request a reduction tied to specific evidence, not a vague range.
Useful exhibits: Vacant lot sales summary within about a mile and within the last 12 months, or a broader radius or time window if the market is thin. Property record cards for neighbors. Photos, surveys, and maps. Once you have your evidence assembled, consider starting with an informal review before filing a formal appeal.
If improvements are the problem
- Audit the property record for square footage, basement, quality grade, and features.
- Photograph condition and collect contractor estimates for needed work.
- Compare improvement values of like properties.
- Argue higher depreciation or a lower cost tier where appropriate.
- Show why your effective age exceeds the model assumption.
Useful exhibits: Photos of wear and tear. Repair and replacement estimates. Comparable improvement valuations. Permit history showing no upgrades. Learn more about what evidence assessors actually care about when reviewing condition-based appeals.
How to pull comparable land and improvement values
| Method | How to access |
|---|---|
| County assessor website | Many counties publish property cards online. Search by address or parcel number. Look for Assessment or Property Card sections that break out land and improvements. |
| In-person | Visit the assessor's office with a short list of addresses and ask for property record cards. |
| Data services | Third-party aggregators like CoreLogic and RealQuest can help if your county site is limited. |
Pull 3 to 5 close comparables. Record land value, improvement value, lot size, and living area. Compute land and improvement $ per sq ft and compare findings.
Bottom line
Ignoring the land versus improvement split is like ignoring half the story. Find which side moved, compare how your neighbors are split, and tailor your evidence accordingly.
Key takeaways
- Check the split, not just the total.
- Compare allocations with close neighbors to test equity.
- Use land sales or extraction to pressure-test site value.
- Document condition to support depreciation on improvements.
- Ask for specific corrections, not general discounts.
Too much work? AppealArc helps homeowners like you by taking care of the heavy lifting: pulling comparable allocations, flags inconsistencies, and drafts the exhibits you need.