The transition towards sustainable construction is crucial, and demountable building elements are frequently advocated for achieving this goal. While these elements offer relocatability during refurbishments, their adoption may increase initial environmental impact due to higher material use and steel connections. To address this, a quantitative assessment of demountable building elements in refurbishment scenarios at the building level is needed, filling a gap in the existing literature. This study bridges the gap by comparing the total environmental impact of demountable and traditional space-dividing walls in refurbishment scenarios for a semi-detached dwelling. Using a life cycle assessment, seven space-dividing wall types, including metal studs, wood structures, and masonry walls, are evaluated under four refurbishment scenarios spanning a 60-year building lifespan. The results reveal that traditional metal stud walls have a lower environmental impact in scenarios with limited refurbishments. In contrast, demountable walls become more environmentally beneficial only when refurbishing at least 60% of the wall area with three or more refurbishments. This conclusion was further validated through sensitivity analysis on the refurbishment rate, refurbished area, and impact assessment method. In this study, the assumed environmental benefits of demountable walls are challenged, providing a robust evaluation in a specific building typology and offering insights for policymakers and industry professionals on the environmental implications of incorporating demountable building elements.