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Maybe there's no set of rules but I would like to hear your thoughts. We are going to add a full dormer to the cape house we are buying. So we will have the officers in the property. We also would like to extend the kitchen to make space for kitchen plus dining room. I know we will have to pay tax for the increase in living space. But if we have new kitchen cabinets and an island installed would that raise tax or are we better off just installing the same cabinets? It won't be as nice as a new kitchen but then we won't have to pay property tax for a new kitchen.
We would also like to renovate the first floor bathroom. If we do that before inspection would that raise tax? Or should we do it after we received the CO for the dormer and kitchen extention?
Would a porch to one side of the front door raise tax? I know it's not considered in living space.
All the duct work is done for central AC but no unit. Any idea how much of the property tax will be raise if we were to add the units?
Second fl currently has 2 BR and 1 bath. We are changing to 4 bedrooms and a bathroom upstairs so the tax will definitely go up. I'm trying to figure out which small modifications we should avoid in order to not have the tax raised further. Ideally we would like one of the rooms to be a master suite with attached bathroom and walkin closet but I'm worried this will increase the tax so we are opting to have only one BR upstairs. We also have to change the stairs on the first floor, I don't think this will have an effect on the tax though.
The way it works, directly from the town's mouth, is if your assessed value goes up by 50%, your taxes go up 50%. Say you have a $400k house and with additions (permit forces new inspection/assessment applicable a year or so later) the house is assessed at $600k, then that's a 50% raise in value. Your taxes would go from something like $8k to $12k (50%). Keep in mind this is how it has worked and they are reassessing everyone from scratch in 2018 I believe, so it's up in the air whether they will retain their methods.
So for your concerns, doing work in your kitchen doesn't necessarily require a permit causing reassessment (they wouldn't come in and price out your upgrades anyway). It's the things like adding a porch (permit) and obviously the dormer. They will take your 4 bedroom and bath figures and come up with an estimated new value. Doing new stairs doesn't affect it. Renovate 1st floor bath (no permit hopefully - but make sure it's up to code) before dormer - I would. Duct work should not affect value unless CAC is added (permit).
Second floor addition obviously adds square footage in addition to the number of bedrooms/baths. This is what they'll use to arrive at your new assessed value. It shouldn't matter if it's an en-suite (master with bath) and walk-in closet or all completely detached from each other. The assessed value will have very little correlation to your home value with all the nice touches from what I've seen. Main points for assessed value - beds/baths/year renovated/sqft/finished basement/garage/lot size/style (perhaps).
The way it works, directly from the town's mouth, is if your assessed value goes up by 50%, your taxes go up 50%. Say you have a $400k house and with additions (permit forces new inspection/assessment applicable a year or so later) the house is assessed at $600k, then that's a 50% raise in value. Your taxes would go from something like $8k to $12k (50%). Keep in mind this is how it has worked and they are reassessing everyone from scratch in 2018 I believe, so it's up in the air whether they will retain their methods.
So for your concerns, doing work in your kitchen doesn't necessarily require a permit causing reassessment (they wouldn't come in and price out your upgrades anyway). It's the things like adding a porch (permit) and obviously the dormer. They will take your 4 bedroom and bath figures and come up with an estimated new value. Doing new stairs doesn't affect it. Renovate 1st floor bath (no permit hopefully - but make sure it's up to code) before dormer - I would. Duct work should not affect value unless CAC is added (permit).
Second floor addition obviously adds square footage in addition to the number of bedrooms/baths. This is what they'll use to arrive at your new assessed value. It shouldn't matter if it's an en-suite (master with bath) and walk-in closet or all completely detached from each other. The assessed value will have very little correlation to your home value with all the nice touches from what I've seen. Main points for assessed value - beds/baths/year renovated/sqft/finished basement/garage/lot size/style (perhaps).
Not true. Your assessed value measures your proportional share of the taxes. It does not reflect your taxes directly. It is possible that your assessed value increases but (since your increase is less than the increase of your neighbors or since the total budget decreases) your taxes decrease. Likewise, your assessed value can decrease, but since it decreases less than your neighbors or since the budget increases (or both), your taxes increase.
There is a list of work that will result in an increase in the assessed value deep in the County Assessor's clutches, but generally speaking, the rule of thumb for work is determining whether it is an "addition" v. "replacement". An addition may include increased livable square footage (finishing a basement or a build-out), installing a fireplace where none existed, installing Central AC, putting up a new garage or shed where none existed, replacing siding with stone, adding a new bathroom. Things that are not additions include replacing electric or plumbing, roof repair/replacement, gutting existing rooms but restoring them to their original use (which are considered cosmetic in nature), anything else that is cosmetic. Driveways and patios are tricky, but the question is whether it is deemed "permanent" or "temporary" - and thus if it is cemented into the ground it is permanent (increase in assessed value) but loose bricks in sand is deemed temporary (no increase).
For your specific renovations:
Renovate existing first floor bathroom - no increase
Addition of porch - increase
Adding AC unit with existing ductwork - depends on whether the house is listed on mynassauproperty as already having CAC
Changing 2nd floor to 4 bedrooms and a bathroom upstairs so the tax will definitely go up - correct
New bathroom for master - increase
New walk in closet - no increase
New stairs - I believe no increase
Kitchen extension - increase
New cabinets/island - no increase
Get the final inspection done as soon as possible and before work is complete, IMO. When you do work, they (in theory) can do an entire reassessment of your house so you want the interior to look as unfinished as possible.
The way it works, directly from the town's mouth, is if your assessed value goes up by 50%, your taxes go up 50%. Say you have a $400k house and with additions (permit forces new inspection/assessment applicable a year or so later) the house is assessed at $600k, then that's a 50% raise in value. Your taxes would go from something like $8k to $12k (50%). Keep in mind this is how it has worked and they are reassessing everyone from scratch in 2018 I believe, so it's up in the air whether they will retain their methods.
So for your concerns, doing work in your kitchen doesn't necessarily require a permit causing reassessment (they wouldn't come in and price out your upgrades anyway). It's the things like adding a porch (permit) and obviously the dormer. They will take your 4 bedroom and bath figures and come up with an estimated new value. Doing new stairs doesn't affect it. Renovate 1st floor bath (no permit hopefully - but make sure it's up to code) before dormer - I would. Duct work should not affect value unless CAC is added (permit).
Second floor addition obviously adds square footage in addition to the number of bedrooms/baths. This is what they'll use to arrive at your new assessed value. It shouldn't matter if it's an en-suite (master with bath) and walk-in closet or all completely detached from each other. The assessed value will have very little correlation to your home value with all the nice touches from what I've seen. Main points for assessed value - beds/baths/year renovated/sqft/finished basement/garage/lot size/style (perhaps).
Thank you for the detailed explanation. Wouldn't the assessed value of a property increase if you upgrade a basic kitchen with simple cabinets to a newer modern kitchen? The kitchen will need a new CO since we're extending it to the back so it'll be bigger.
Right now the fair market value of the property is 410,000 and the tax is about $11xxx. So if I look at properties with the same number of bedrooms, bathrooms and living space will I be able to get an idea of what the new fair market value would be after the new assessment?
We can skip the porch and CAC to keep the tax lower.
Not true. Your assessed value measures your proportional share of the taxes. It does not reflect your taxes directly. It is possible that your assessed value increases but (since your increase is less than the increase of your neighbors or since the total budget decreases) your taxes decrease. Likewise, your assessed value can decrease, but since it decreases less than your neighbors or since the budget increases (or both), your taxes increase.
There is a list of work that will result in an increase in the assessed value deep in the County Assessor's clutches, but generally speaking, the rule of thumb for work is determining whether it is an "addition" v. "replacement". An addition may include increased livable square footage (finishing a basement or a build-out), installing a fireplace where none existed, installing Central AC, putting up a new garage or shed where none existed, replacing siding with stone, adding a new bathroom. Things that are not additions include replacing electric or plumbing, roof repair/replacement, gutting existing rooms but restoring them to their original use (which are considered cosmetic in nature), anything else that is cosmetic. Driveways and patios are tricky, but the question is whether it is deemed "permanent" or "temporary" - and thus if it is cemented into the ground it is permanent (increase in assessed value) but loose bricks in sand is deemed temporary (no increase).
For your specific renovations:
Renovate existing first floor bathroom - no increase
Addition of porch - increase
Adding AC unit with existing ductwork - depends on whether the house is listed on mynassauproperty as already having CAC
Changing 2nd floor to 4 bedrooms and a bathroom upstairs so the tax will definitely go up - correct
New bathroom for master - increase
New walk in closet - no increase
New stairs - I believe no increase
Kitchen extension - increase
New cabinets/island - no increase
Get the final inspection done as soon as possible and before work is complete, IMO. When you do work, they (in theory) can do an entire reassessment of your house so you want the interior to look as unfinished as possible.
Thank you so much. Currently its not listed as having central AC but this is something we don't mind skipping. And the porch too.
Can you please clarify your last couple of sentences. I thought the inspection is done when everything is complete. What needs to completed for the inspection to be done? Also do we let the town know when we're ready for the inspection?
^^ You will want the central air. Its not worth the tax savings skimping out on it. I think mine went up $150 a year with it.
So many people say this, so i believe you, but I've never even thought about getting CaC. My room A/Cs do just fine.
Incidentally, what would even be entailed in putting CaC into an old house, with a finished attic and basement with steam heat and plaster walls?
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