Patios are a great aesthetic addition to every home. Therefore it isn’t always a surprise that most people invest time and money into constructing a solid deck, pergola, or patio. However, because the desire to own a beautiful home is bigger than the desire to pay substantial property taxes, many homeowners inevitably wonder, does a patio increase property taxes before building one?
The answer to this question is dependent upon a few factors. But if the patio construction exceeds or is up to 5000 dollars and adds square footage to your home, your property tax bill will go up.
On the other hand, if this isn’t the case, the patio is not likely to be considered an addition that can improve home value and, as such, will not necessarily increase your property tax bill.
Read through carefully if you want to commence any home improvement projects but are concerned about your property tax bill. This article covers everything you should know about property taxes, including what makes them skyrocket and how you can get them reduced.
- 1 What Home Improvements Increase Property Taxes?
- 2 Does a Concrete Driveway Increase Property Taxes?
- 3 Do Decks Raise Taxes?
- 4 Does A Patio Increase Property Value?
- 5 When My House Goes Up In Value, Do My Property Taxes Go Up As Well?
- 6 How To Reduce Property Tax
- 7 Does Landscaping Increase Property Value?
- 8 Conclusion
What Home Improvements Increase Property Taxes?
Specific home improvements can be the catalyst for reassessment and subsequent tax bills. Here’s a list of what these improvements are:
- New bathrooms in the existing space
- Foundational or structural renovations and designs
- New fireplace and garden shed
- In-ground swimming pools
- Land improvements
- Completion of a basement
- Kitchen remodeling or constructing an outdoor kitchen
These home improvements are bound to increase the value of your home, and as such, your home’s taxes will also increase. For instance, a kitchen remodels and a bathroom can upscale your home value by at least $30,000.
So you see why you might get a higher tax bill? Most people believe that they can do a remodeling job or some renovations quietly without any attraction or attention, and as a result, they can evade property tax bills. However, this is false.
County tax assessors frequently keep track of the properties in every district through field assessments.
They drive around (or hire people to drive around) and look out specifically for home or community changes. If they notice anything new, they will stop over for a chat but typically won’t venture into the interior of your home without a specific invite from you.
Another way is that these assessors keep track of building permits. Ordinarily, you are supposed to file a building permit before beginning any new construction in your house.
Assessors meticulously monitor these permits and always look out for large-scale renovations and high-cost constructions. If your property improvement falls into any of these categories, you can be sure they would package a top-tier property tax bill for you.
Does a Concrete Driveway Increase Property Taxes?
Yes, it does. A concrete driveway is a practical and highly aesthetic improvement to your home that has the potential to upgrade your house value significantly.
However, most people wouldn’t even consider constructing one without solid motivation. After all, a concrete driveway can cost a little above 5,000 dollars or more depending on specifications, land space, and preferences.
So yes, it is bound to increase your property tax. Property Taxes are based upon two main factors – local tax rate and assessed property value. The local tax rate is based on mileage, which isn’t the same for everyone.
For instance, if your local tax rate is 17 mills, and your property value is 100,000 dollars, you’ll pay 1700 dollars in property taxes.
So if your property has been assessed and valued, it’s best to do your homework and understand how much you’ll be paying for newly increased tax and know if the investment will be worth it when you decide to sell.
An increase in property value automatically equals an increase in property tax. Suppose the driveway still exists when you are willing to sell your home, and your neighborhood isn’t filled with concrete driveways. In that case, you might be able to grab a chunk of an excellent price depending upon buyer specifications.
When it comes to value, however, the value it adds to your home is dependent upon a few distinctive factors such as
- The state you live in
- The nature of the other homes in your area
- Also, the concrete driveway construction quality
- and the unpredictable state of the local and national housing market.
Do Decks Raise Taxes?
Yes, they do because they are considered significant improvements by the IRS. However, suppose the deck’s construction or any other home improvement features was due to preserving something historically important in your home. In that case, you might be exempted from taxes. However, this is primarily a rare occurrence.
Decks are an excellent addition to any home, but the fact that they are expensive is unarguable. A typical attractive deck construction might require you to shell a payout of at least 5,000 dollars.
That’s a pricey sum; you’ll need solid reasons to construct a deck if you are willing to part with that amount of money. Depending on where you live, a deck can add between 8-and 20% to your home’s overall value.
In addition, taxes vary depending upon your residential city. Check with your local tax assessor before starting any home improvement constructions or remodeling.
Does A Patio Increase Property Value?
Yes, it does. Several studies have shown that installing patios for outdoor purposes triggers a tangible increase in property value. Abby Nelson, an expert real estate property agent in Orlando, Florida, with over a decade-long experience, once stated that Patios add a ‘wow’ effect to most homes.
They are visually appealing to buyers, and they can help a property sell higher and quicker. Patios have always been and always will be a good home investment option.
They provide generous space to hang out with family and friends even on rainy days or nights, they can be used for entertainment, and you can enjoy your outdoor space in all seasons.
But how they affect taxes is dependent upon where you live. Some places offer high tax deductions, while others offer tax incentives. One thing is for sure. Patios are a valuable addition when trying to sell a home fast.
If the cost of building your patio costs over $5,000 or more with a nice size and impressive design, this can add 8-10% to home value and give you an excellent ROI of about 80%.
Sometimes it is advisable to repair, fine-tune, or refinish an existing patio. You can opt for an inexpensive patio idea to evade this payment.
These repair costs can cost just a little over a thousand dollars, but they can bring in a great ROI of about 500%. Patio ROI is also great for lower-scale and less ambitious projects. Sometimes spending less money is the best way to make your money back.
Don’t go all out for luxury finishings, but attract buyers with features they prioritize and let them design the space to their taste and preferences once it becomes theirs. Of course, location is also of the essence.
It matters a lot. South Atlantic states such as Georgia, Maryland, Virginia, and Florida have weather that allows longer use of outdoor space. Therefore, the ROI in those states is much higher.
It is advisable to give patio construction or refinish to professionals if you want to sell your property for a high value. Shabby, mismatched, or downright terrible-looking patios will not attract buyers.
And they would only decrease your home value, not increase it. So unless you’re incredibly handy with nails, masonry, landscaping saws, and the likes, Patio installation isn’t for the average DIY enthusiast.
When My House Goes Up In Value, Do My Property Taxes Go Up As Well?
Improving your home means you are increasing the value of your home. And since property taxes are partially based upon your home’s value, your property taxes will inevitably increase.
Anything that increases the square footage in your home automatically invites a reassessment and, subsequently, higher property taxes. So, for example, replacing cabinets in your kitchen won’t trigger new taxes but remodeling the entire kitchen will.
Outdoor improvements can also be a catalyst for a rise in property taxes. For example, constructing patios, decks, sheds, fences, and in-ground swimming pools increases home value and property taxes.
Therefore, it is important to be thoughtful and meticulous before starting renovations. Calculate the renovation cost and how much it will add to your home value.
Then you need to figure out the possible rise in tax bills and if you can handle it. If remodeling and home improvement costs will leave you cash strapped without enough money to pay your bills, then it isn’t advisable to embark on it until you can afford to do so.
How To Reduce Property Tax
We all desire beautiful homes, but not expensive disbelieving taxes. Unfortunately, the taxes keep coming even after paying in full mortgages. Most homeowners find them burdensome, primarily because of their steady rise.
If you feel that your property taxes are too high, then here are the steps to reduce them. First, it is imperative to note that there’s no way to be completely free from them. But there are ways to get them reduced.
Request For A Property Tax Card
Most people aren’t even aware of these things, but they exist. You can walk or drive to the town hall and request a copy of your property tax card. It is usually gotten from the local assessor’s office, and it will provide you with all the legitimate information that has been gathered over your property over time.
Such data can include the size of your land, the number, and type of fixtures, special features, and room dimensions, amongst other things. Therefore, you should not just get this card for ownership but also for the sake of analysis.
Often, there might have been a few mistakes costing you high bills, and you must note them and bring them to the assessor’s attention.
The assessor will evaluate and make the necessary adjustments and corrections. Unfortunately, mistakes are common, and most people pay for these mistakes out of plain ignorance.
Stay Clear Of Renovations
If you don’t want an increment in property billing, staying away from home renovations and remodeling is advisable. Structural changes to your home or property will raise your bill.
However, if you need to redo a part of your house and it is necessary, then conduct your due diligence with the local tax office to estimate what renovations will now cost you in terms of property billing.
Research Your Neighbors
Apart from getting information about your home from the local town hall, you can also get home assessment records and information about your neighbors. In analyzing comparable homes and statistics of your city/town, you might be surprised at the number of mistakes you might find.
If, for instance, you reside in a five-bedroom home with one garage and you pay up to 2,700 dollars in taxes, but your neighbor has a five-bedroom house with a 150 feet shed, garage for two cars, and a pool, but he pays just 2,500 then you know there’s an obvious problem.
Unless, of course, your home has uniquely designed features. No matter what, it is still worth investigating the disparity and being sure you aren’t paying way more than you are supposed to. Assessors aren’t exempted from making occasional errors, but they aren’t the ones paying expensive property taxes.
Allow The Assessor Into Your Home
Local assessors aren’t obligated to force themselves into your home. And you do have to give them access to the interior of your house if you don’t want to.
However, the downside of this is that they would assume that you have expensive renovations or fixtures, resulting in a much higher bill for you.
So it is recommended to give them access to your home and provide the building permits for your renovations.
Walk With The Assessor
Let the assessor roam freely in your home without walking around with them is not good. Not all assessors are detail-oriented enough to notice everything. Some will only notice the shiny marble-topped counter in the kitchen but will pretend not to see the cracks in the ceiling.
It isn’t a good idea to just let them wander free. Instead, walk the home with them and politely point out your house’s favorable and unfavorable parts. This will ensure you receive an entirely fair assessment and evaluation of your property.
Most cities have a policy where those who don’t give assessors access to their homes are given the highest assessed value for the property, whether it’s fair or not. This leads to problems down the line. This would be an avoidable issue if you were granted access in the first place.
Your tax burden can be significantly lower if you are a senior, veteran, have a disability, or have an agricultural property.
An appeal should be a last-ditch effort where all else has failed. This would cost you a small fee for the review. It will also require the services of a lawyer. An appeal has to be done with appropriate timeliness if you want it to succeed.
After the review, a comparison is made with the recent assessment of your tax bill, and a decision is made. Sometimes it takes time, and sometimes it is immediate. If it goes well, you would still be taxed at the same rate, but your bill will be reduced.
Does Landscaping Increase Property Value?
According to a Virginia Tech study, landscaping can greatly increase curb appeal and give properties a fifteen percent increase in value. Landscaping isn’t just all about sticking flowers and shrubs into the ground.
It’s more about sophistication and organization. Landscaping should follow an established budget and a coherent, professionally outlined plan that would result in a beautiful organization. This is how it can increase property value. Conversely, poor landscaping architecture will only decrease home value.
Balancing the desire for a beautiful home and the responsibility of high property taxes isn’t all that difficult.
Hopefully, the article has answered the infamous question does a patio increase property taxes? But unfortunately, property Taxes are not set in stone.
There might never be ways to evade them completely, but there’ll always be ways to reduce them.