How remodeling can hike up your property taxes
Remodeling your home increases its value. That’s a good thing! The downside is that it will probably increase your property taxes. Remodeling projects typically trigger property reassessments. When you file for permits, it tips off the taxman to come and reassess your home. Here are a few of the ways that remodeling projects can change your property tax bill.
Big Remodeling Projects Boost Taxes
You can usually get away with sprucing up your home in minor ways. A new bathroom sink here, some new carpeting there. It’s when you tackle larger projects that you can show up on the taxman’s radar. Adding a bathroom will almost always trigger a property reassessment.
Kitchen improvements can be a gray area. Things, like adding cabinets and replacing countertops, will likely trigger a reassessment. Moving a wall may increase your tax bill, even if the square footage remains the same.
Adding Space Adds Taxes
Any project that increases the usable space of your home will most likely raise your property taxes. This probably goes without saying, but adding a new wing to your home will trigger a reassessment. This also includes finishing out existing spaces.
That means when you turn a basement or garage into a family room, it will increase the value of your home. The same goes for your attic. If you add flooring, ventilation, heating, or finish walls, the taxman will ding you for it.
Small Improvements Don’t Come Free
Even adding extras like an in-ground pool, a garden shed, or a large deck can increase your tax bill. If it makes your house more enticing to potential buyers, it adds value to your property, which means more taxes. Also, functional improvements to the infrastructure of your home can increase taxes as well.
If your house is susceptible to flooding, re-grading the property to improve drainage could invite a reassessment. Congratulations! Your home is more valuable! Now you have to pay for it.