You might not realized that after many remodeling projects, your property taxes will go up. It's logical because you've increased the value of your home whether you added a room, remodeled your kitchen or removed a wall and added a fireplace. Your home is worth more and your home's assessed value is higher. That's not to say you should do any remodeling, just that you want to understand how remodeling affects property taxes.
At the same time, it's possible your current property taxes are higher than they should be. The easiest way to learn if your assessed home value is on target, is to compare it to your neighbors as you know their houses. Or you can now check home value's online at sites like Realtor.com, or my favorite site for this is Zillow.com.
Real estate agents don't like Zillow because their Zestimates create unrealistic expectations as to home value. That's true but Zillow makes it really easy to track prices going up, and prices going down. What I love is the extra information Zillow provides, like tax history. You can quickly research your property taxes, as well as those of your neighbors without even bothering them (or embarrassing them if they don't know what they're paying).
How Remodeling Affects Property Taxes
While I'm not an expert on appealing property taxes, I can share my experience fighting the assessment on these two fireplaces in my hundred year old Victorian (learn about our Kitchen Remodel in 100 Year Old Victorian). In fact the best time to learn how remodeling affects property taxes is when you're planning your remodel, or maybe you're building a new house.
Knowing our 4-story addition and kitchen remodel was going to significantly increase property taxes, I appealed my “before tax assessment”. It was an interesting discovery process, and not as logical as I expected. Each fireplace in Portsmouth NH was assessed at $10,000. That's right! Even though these fireplaces didn't function, they were taxed as if they did, and worse, so was the new $1,000 gas insert fireplace which we added to the family room.
Learning How to Appeal Too High Property Taxes
First you want to understand that in many states, property taxes are the primary source of revenue for state and local government. This is absolutely the case in New Hampshire where there is no sales tax, and no income tax … so that's why the property taxes shown above are so high.
Now I could delve into this topic in a lot more detail, but a friend and Realtor, Kyle Hiscock, has already written a great article on this topic. Here's what he covers in greater detail, so I encourage you to click to read How to Appeal a High Tax Assessment On a Home.
- What is a tax assessment, and what things affect your home's tax assessment?
- How tax assessments affect homeowners, because it's important when selling your home.
- How to determine if it's worth appealing your tax assessment (determines property taxes).
- Tips on how to appeal your tax assessment, and timing is critical. You'll need to understand the deadline for filing an appeal (in New York it's called “tax grievance” day).
PS While I wasn't able to lower my tax assessment for non-working fireplaces, I did learn that my house still showed a third kitchen which no longer existed, and thus did get my taxes lowered a wee bit. That's because during World War 2, many older homes were carved up into small apartments to house people working at military bases. We kept the third floor apartment but converted the second floor kitchen, to a bedroom … and since there was no stove in the bedroom, it could no longer be assessed/taxed as a kitchen!
Had to call the Portsmouth tax assessor's office to learn what's changed since we remodeled our Victorian. She didn't focus on the stove as much — “if there's more than a sink, enough to make it a useful kitchen, then it would be taxed as a kitchen. If there's a refrigerator and microwave, but no sink … it's not a kitchen.” So before you include a full kitchen in your basement remodel, you'll want to research further, how remodeling affects your property taxes (and use the sink in the bathroom).
The extra charges of a government on the purchasing of property in the form of general country tax can be eliminate easily with in a seven days according to the rules and regulations of a government,If you write an application with the authentic reasons for a elimination of property tax and also attached a legal documents of a property tax pairs after that submitted in the government office by the tax layers which is helpful for you to approved the claim of your property tax in the seven days without any allegations of a government on the application of your property tax ,Remember don’t write any irreverent reasons in the applications of property tax you want to submit in the office of government and also don’t attached any illegal or extra document of property which increase the chances to refuse or neglect your claim application ,So keep it in your mind all the instructions and requirements given to you by the tax layer after concerning this kind of matter according to the current policy of government .
Sounds like property taxes are very different in Australia … so thanks for sharing, but afraid I can’t comment because I’ve never owned property down under.
In most jurisdictions there is a mechanism in place to notify the local Township Assessors that there may be improvements in the works which may increase or decrease the value of the home for purposes of valuing the improvements on the property.
For example, to remove all or part of a building improvement, or to add square footage to a home, typically you need to obtain a “permit” in order to have some oversight by the local officials that the work meets certain standards of safety or meets local building guidelines for adequacy of the materials used and to ensure the structure is sound. Thus, when a “permit” is pulled, the building department notifies the Assessor that there may be a change in the “characteristics” that make up the property (i.e. an improved basement, or an additional bedroom or bathroom being added to the structure, etc.).
All homeowners should check with their local Assessor’s Office to see if the underlying property record card that the Assessor keeps and uses to value property in some reasonably “uniform” fashion, correctly describes the basic makeup of their property. Warning – – incorrect information identified in the Assessor’s records and communicated to the Assessor’s Office may lead to an increase in your property’s value, or a decrease in the property’s value, depending on the nature of the discrepancy.
Thanks Glenn, for this additional information explaining how building permits can affect a home’s property taxes and/or assessed value (different than market value). Here’s another article we have on this topic, as there’s lots of confusion about home value per your town’s assessor and home prices when selling/buying, https://hometipsforwomen.com/real-estate-tips-to-research-home-value
Nice details Glenn & it took me a moment to realize you could remove enough square footage to get your assessment & therefore property taxes lowered. It’s not very common but I have seen stories where people have ripped out additions that were poorly done, so it makes a lot of sense.