Deconstruction vs Demolition

Deconstruction vs Demolition Cost Comparison

Deconstruction Firm** Demolition
Leveling of 2,098 sq ft home $20,000 $7,000
Disposal of wreckage $0 $3,600
Total Costs $20,000 $10,600
Value of Donated Materials $194,500 $0
Tax savings from donated materials* $126,425 $0
Net benefit to owner* $139,425 ($10,600)

*Assuming 35% tax bracket. Net benefit to owner is a combination of the tax savings from the donated materials as well as from the deconstruction cost.

**This example is with a Non-Profit deconstruction firm. If you work with a For-Profit deconstruction firm, the value of the donation would be $159,800 and the deconstruction fee would not be tax deductible.

Sample Deconstruction Project #1

  • Description: 3,997 square foot home
  • Value of donated materials: $294,500
  • Federal and state tax rate: 40%
  • Tax benefit to owner: $117,800
  • Deconstruction firm: For-profit
  • Deconstruction costs: $35,000
  • Net benefit to owner: $82,800

Sample Deconstruction Project #2

  • Description: 3,997 square foot home
  • Value of donated materials: $400,000
  • Federal and state tax rate: 40%
  • Tax benefit to owner: $160,000
  • Deconstruction firm: Non-Profit
  • Deconstruction costs: $35,000
  • Net benefit to owner: $174,000