Rebuilding cost (valeur de reconstruction)

The rebuilding cost answers a different question from market value: not “how much would this property sell for?” but “how much would it cost to rebuild it today?”. The Charte de l’expertise en évaluation immobilière (the French property valuation charter) defines it as the cost of rebuilding the buildings and the equipment of an immovable nature, professional fees and technical costs included, and specifies that it generally includes the cost of demolishing the existing structures. It is established on a like-for-like or equivalent basis, from quotes or professional ratios.

It concerns the buildings only. The land is not included, since land cannot be rebuilt. Nor does it include loss of rent or the cost of temporary accommodation during the works, which belong to other heads of loss.

Where the rule comes from

Title III, § 1.13 of the Charte (6th edition, November 2025) defines the rebuilding cost as new, and § 1.14 the insurance value, which derives from it. The EVS 2025 devote guidance note EVGN 6 to cost assessment for insurance purposes. In home insurance policies, compensation on a “new for old” basis rests on this concept, with a deduction for wear and tear whose rules are set by the policy.

In a valuation report

I describe the buildings (floor areas, construction method, equipment, quality of finishes), then apply updated unit construction costs, taken from quotes or professional indices, adding project management fees, technical costs and, where relevant, demolition. The report distinguishes the rebuilding cost as new, the applicable wear and tear and the rebuilding cost net of wear and tear. This value is useful after a loss, to check an insured sum, or to value a specialised property with no comparable market, alongside the depreciated replacement cost.

Example

A house of 130 m² habitable area, built in 1985, with a 25 m² garage. Rebuilding cost as new adopted: €2,100 per m² for the dwelling and €900 per m² for the garage, that is €295,500, plus 12 % for fees and technical costs, giving €331,000 rounded. With wear and tear of 25 %, the rebuilding cost net of wear and tear is €248,000. The market value of the same house, land included, established by comparison, is €290,000: the two figures do not mean the same thing and cannot be substituted for one another.

Not to be confused with

Depreciated replacement cost values a modern equivalent of equal utility, land included, less depreciation, in order to approximate a value. Market value measures the probable price on the market, which may be below or above the rebuilding cost depending on location.