What type of depreciation results from normal wear and tear over time?

Physical depreciation refers to the decrease in the value of a property or asset due to physical factors, including the effects of normal wear and tear over time. This type of depreciation occurs as materials break down, appliances become outdated, and general maintenance needs increase due to age and usage. It reflects the tangible deterioration of the asset that can be seen in its condition and functionality.

Physical depreciation is a critical concept in real estate appraisal and taxation because it helps assessors determine the fair market value of a property. By understanding the extent of physical depreciation, an assessor can make more accurate evaluations for property taxes, sales, or investment decisions.

While options like functional obsolescence, economic obsolescence, and market depreciation involve various factors affecting property value—such as design flaws, external economic factors, or changes in market trends—none directly address the impact of time-related wear and tear that characterizes physical depreciation.