For the 2025 tax year, Tarrant Appraisal District (TAD) has calibrated the BPP Percent Good Schedule (or Depreciation Schedule). This update uses a method that more accurately represents how property values evolve over time, factoring in inflation, market trends, and the availability of comparable items in the market, etc.
Why the Change?
The updated Percent Good schedule incorporates the most recent economic data. It considers factors like the changing cost of goods and services, tracked through the Consumer Price Index (CPI), and how these costs are affecting the market today. For instance, used car prices may be significantly higher now due to limited availability and rising costs of new vehicles.
How is Depreciation Measured?
Unlike the way businesses track wear and tear on equipment, TAD’s depreciation method evaluates how asset value shifts due to supply and demand, interest rates, and technological advancements. A declining balance formula is applied to calculate annual depreciation percentages, which are referred to as the “percentage good.” This percentage is then adjusted using a CPI factor to account for inflation and broader market changes.
Why Does it Matter?
As properties age, they generally lose value, but calculating that depreciation should also reflect current economic conditions. For example, replacing equipment or purchasing a used item today might be more expensive due to inflation than in previous years. The revised depreciation schedule is designed to more accurately capture what used property would sell for in the open market.
In a nutshell
This update ensures BPP assessments better align with current economic realities. While the process may be complex, it’s essential to base appraisals on today’s market rather than outdated figures.