In real estate appraisal and taxation, salvage value refers to the estimated fair market value of a property or improvement at the end of its useful life. It represents the amount that is reasonably anticipated to be recoverable when the property is no longer economically productive.
Salvage value is used in computing depreciation for tax purposes. By estimating the residual value of the property, depreciation calculations can more accurately reflect the gradual loss in value over the asset’s useful life.
