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Some home renovations can raise tax bills

WASHINGTON – Dec. 3, 2015 – Homeowners tackling a remodeling project may want to consider how their renovations could impact what they pay on their taxes. Renovations can increase a home’s assessed value – and assessed value is used to determine the property tax that owners pay.
The improvements that can increase a property’s reassessment vary considerably by location. If they want to avoid surprises later on, homeowners may want to ask their city in advance about a specific improvement and its potential impact on their home’s assessed value.
In general, however, remodeling projects that increase living space tend to increase property taxes. Also, finishing space that an owner already has – such as an attic, garage or basement – also tend to increase the property tax bill.
“Anything that increases the square footage of the living space is likely to increase the value of the home, and therefore the assessed value,” says Tom Shaer, deputy assessor for communications with the Cook County Assessor’s Office.
Also, large renovations – such as adding a bathroom – likely will prompt a reassessment of a home. That’s because an “additional bathroom allows more people to live in the house,” therefore increasing its value, says Pete Sepp, president of the National Taxpayers Union, a pro-taxpayer lobbying group.
Kitchen renovations can be one gray area, says Michael Kapp, public information officer for the Los Angeles County assessor’s office.
“If they’re replacing countertops and not extending them, it would probably not [trigger a reassessment],” Kapp says. “If they add additional cabinets or move a wall, for example, that would trigger reassessment” even if the square footage does not increase.
Some owners may be surprised at what will trigger a reassessment. For example, adding a garden shed could potentially trigger a reassessment, Sepp says. Also, in-ground pools, a very large deck or even re-grading the lot to improve its drainage could potentially increase the property tax bill too.
Source: “Home Renovations That Add Value – and a Heftier Tax Bill,” realtor.com® (Nov. 27, 2015)
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Source: Florida Realtors Feed

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