question about property value & taxes (Dallas: wood floors, for sale, real estate)
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This may be a simply answered question, so please forgive my ignorance.
Lets say I buy a house for $100k and through the course of ownership put in a pool, perhaps a spa, maybe build another room onto the house and turn it into a small home theatre with nice seats and projector, put in a cobblestone driveway, etc, etc, this will obviously raise the value of the property, right? Now, my question is, with all the upgrades I do, will I be paying more in property taxes? I guess a simpler way to pose the question is, if I want to live a nicer life, such as with the aforementioned amenities, I'd better be able to afford the property taxes come next year... right?
If I have this wrong, please correct me. Thanks in advance.
Try the Harris County tax office to get you a pretty good idea of what taxes on the size of house/property in the area you are interested in (If it is not in Harris County they should have links to the neighboring counties tax offices. The Dallas one does at Dallascad org). The Harris County office is hcad.org.
As for what will the taxing authority do if you add any improvements to your property. If you build an addition, yes they will add on to the dollar figure of "improvements" to your property. If you pour a concrete drive/patio, whatever or add onto what is already there, yes this is an improvement and will be taxed accordingly. If you add on a patio cover, arbor, etc, yes, still an "improvement". If you add/build an out building, workshop, shed, etc, improvement and will be added on. If you put in a pool, "improvement" and will be taxed accordingly. If something you add on or build has a roof over it and has heat & a/c, even more for the dollar figure on the "improvements" for your property. As for the home theater, that is personal property and can not be assessed a property tax. They can not tax you for your furniture and personal belongings/furnishings IN your home. You do NOT have to tell them you are building on over your garage to put in the latest and best technology for a totally AWESOME home theater w/ leather theater seats and all w/ the overhead projector and such. None of their business. All they care about are the 4 walls & the roof. BUT, they will have the MLS listing if you buy a house that is existing that tells all the "goodies" about the property: granite countertops, wood floors, built in appliances, etc. And they WILL or they can try and up the amount for "improvements" because of this. I know protesting my property taxes the first year we bought this house they had all of that and we were like, "Um, that is in EVERY house in this neighborhood. So why is mine still WAY over everyone elses?". LOL!!! And I am serious. This year I saw on the computer where the county appraiser added $24K to our property because we have a smattering of "stone" on the front elevation. DUDE, that is typical for the neighborhood, give me a break. While every house in the neighborhood does not have "stone" it is "typical" for this neighborhood. There is no way in you know what that I could list my house and add $24K to the asking price because of that "stone" around my front door and porch. Buyers would tell me where to shove that "stone". I would.
How can they do that? What if I never plan on moving. How is it that if I cant afford to have someone come in and put in a pool, so I do it myself, I will still have to be able to pay for it come tax time? This is freaking bull****e if you ask me. How in the hell are they getting away with this?
Am I just being naive? Am I too young to understand that life sucks and thats simply the way it is?
It does not matter if you do the "improvements" your self or you hire a contractor, it is still an improvement to the property. These improvements are permanent (unlike your personal furnishings and belongings) and therefore add, ADD, to the value of your property. You are taxed on the value of what your property is worth. Say I bought a lot in a very nice upscale neighborhood but wanted to build myself. The neighbhors hired a contractor/builder. Should my house be worth less because I did it myself? The tax office will ALWAYS know if you added an improvement to your property. For anything to be done you must get a permit from the city and they will do an inspection. So everything is on file and the tax office knows about it. They are required to reappraise the property every 3 years unless there has been a significant change in the market for that area then they may do it every year. So they will be out driving around, taking pictures, making notes, etc. They will see that nice patio cover you put on, they will see if you added onto your garage, they will see if you added a pool. And if you have a pool put in, you are NOT going to be doing it yourself. That is one job that is not a "do it yourself" project. You may be able to get by for a year w/o them knowing you did some minor upgrades to your property yourself but that is it.
All in all it is pretty fair. The state laws dictate that the houses/properties in a given area must be appraised accordingly w/ their surroundings. So that house that I built myself, if I only spent $250K but my neighbors paid a builder $500K my house should be in line w/ the rest of the neighborhood. And when you go to sale, you are going to want this to be so.
I believe if you do interior work yourself, like adding wood floors, granite countertops, changing all the cheap cabinets that were standard at the original construction and putting nice oak ones or adding an indoor spa, which would add thousands of dollars to the value of your home, I can't see how they could know anything, as long as you do not pull a permit. Adding a pool would require a permit, and the Appraisal District gets this info, and yes this will increase your taxes. As far as contesting appraisal value, I think they are starting to get smart in some areas and have the value of your home appraised less than it really is,
although the tax rate is higher than usual, so they would get the same amount of money. This way they can always raise the value of your home when they choose, and you can never contest it because as soon as they say you are free to get an a professional appraisal, then they might do some research and risk jacking it up even higher, or make you think you are fortunate. This is how it was explained to me, however. As far as your cobblestone driveway I am not sure if you would have to pull a permit for this. I know that most people don't in my area.
This is so funny. No really. I was coming on to talk about this topic exactly. We have our house up for sale right now and the Realtor is telling me I will have lots of problems selling it because so many rooms are not permitted. That, I will need a cash buyer.
This is the way we bought this house and now we have to be in trouble because we excepted it this way. So there is two sides to this story. Think about it when Its time to sell it. If you are young you probably will want to move on to another house. People usually want to move on after 5 to 7 years.
They won't make me tear them down but they have it on Record that it is a 924 sq ft house when It is a 1500 sq ft house now. So not only would my taxes have gone up if they find out we could be find for it.
I live in California and I guess every State is the same. We don't sell houses on the value though we sell them on price, what we paid for them.
So think of the future. You may be sorry you did all that later. We are sorry we excepted it this way but it was soooooo cute.
I do not know the laws in California but the banks usually recognize the value of your house by professional appraisers ordered by them. They ought to recognize your value as the 1500 sq ft. and give the buyer the loan based on this. I would think they could not fine you for additional work done to the house when you bought it that way. Good luck.
The sad part about that is the appraisers will deduct the ad on's. So the appraiseral is usually lower. That seems so unfare to me but that is Cali.
I'm not sure I understand this.Real estate appraisers that work for real estate agencies are private entities,not arms of the government,and so should only look at the construction of the house and not whether a permit was pulled to expand it.Somebody seems to be giving you wrong info.I would change realtors,as it sounds like yours may be trying something on you like getting you to sell low to a friend of theirs in order that they can turn around and resell for a profit.Banks that give you the loan hire their own appraisers to look at the property,so again,they have nothing to do with any permitting process.Besides,if you bought the house in this shape and had a title survey done when you bought it then I don't see how they say you will have problems.Somebody is jacking you around.Get more opinions from other experts.
Hi Lifer, I was wondering what you would say about this.
We have 1 br, livingroom, garage, and two patios not permitted. She (Realtor) excepted that and now we found out that our foundation under our mobile was also not permitted. WE looked back on our contract from years ago and yes we signed it. They told us that these things were not permitted. I forgot about the foundation under the mobile. It is a 3 ft block wall holding up the mobile, plus the tie downs. In great shape. I can't see a problem, can you? Maybe I am mistaken.
She wants to send over some guy to look under there for what? $350 to see what I have under there. She thought my mobile was on a slab. I told her I would let her see it when she comes over. grrrrrr I said, no to the guy coming over. It is not a big deal and she keep pressuring me to do this. Why I don't know.
She says she need records of the 3 ft block wall. There are no records. She said that FHA will not lend money on this. I said get someone else. She got rid of that on the MLS and said now we can go Conventional or Cash.
My problem is she won't stop asking me to let this guy look under my mobile. Maybe you can tell me why? She can look and see that is exactly what it is herself. In the meantime, she has not put an ad in the paper for me and that is ticking me off real bad. She says the broker does that.
Am I in trouble or not.
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