What does the term 'economic life' refer to in property improvements?

The term 'economic life' specifically pertains to the duration for which a property improvement remains economically viable. This means it reflects the period during which the property can generate income or provide value that exceeds the costs associated with maintenance, repairs, and other operational expenses.

In real estate and property assessment, knowing the economic life is crucial for determining depreciation and overall valuation. It's not merely about how long a structure can physically exist or the time frame before property taxes might increase, but rather the financial efficiency of the improvements over time. Options discussing the total lifespan or the actual time an improvement remains standing focus more on physical attributes rather than economic realities. Thus, the concept is fundamentally tied to the market and financial assessments.