Costs to Consider with Commercial Demolition and Potential Tax Benefits
Are you preparing to tear down a commercial property? If so, you might be wondering what exactly you can expect to pay one of the local demolition companies in Toledo, OH to get the job done.
National statistics indicate the average cost for a commercial tear-down is about $30,500. Of course, there are a number of factors that will influence the cost of any single demolition project. Here are just a few examples:
- Size: In attempting to estimate the cost of demolition, you should measure the structure in square feet as accurately as possible. The national average for commercial demolition falls between $4 and $8 per square foot, and the cost per square foot tends to go down as the total square footage increases. If you do not know your square footage, you can at least estimate by measuring the space out yourself with a tape measure or other measuring tool.
- Inspection: You should get the building inspected to see if you have any hazardous materials inside of it, such as asbestos or lead paint. The presence of hazardous materials will likely make the demolition process more expensive, adding as much as $2 or $3 per square feet of affected space.
- Landfill and hauling: Some demolition contractors handle debris disposal, while other times you are left to take care of that on your own. Either way, debris hauling and landfill services are another extra cost you have to consider beyond just the actual physical demolition of the property.
Be sure to get estimates for the job from multiple demolition contractors. This can help you get a sense of what constitutes a fair asking price and whether one company is going to give you a better deal than another.
Unfortunately you do not get any tax write-offs under current laws for demolishing an existing commercial building. The demolition costs simply get added to the cost of the land beneath it for tax purposes. This means you won’t realize any tax benefit from the demolition itself, at least not until you sell the land.
However, if you renovate a building instead of completely tearing it down, you may be able to write off some of the costs of that project. You are able to claim annual depreciation deductions for renovation work, including costs attributed to the partial demolition of the structure, so long as at least 75 percent of external walls are retained as external or internal walls, and at least 75 percent of the existing internal structure remains intact. If you meet those two conditions, you’ll likely be able to get some tax benefits from your project.
If you’re interested in learning more about the processes involved with providing demolition services for commercial properties and what you can do to select the demolition company in Toledo, OH that is best suited to tackle your job, we encourage you to reach out to the team at Klumm Bros. today and we’ll be happy to tell you more about our services.
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