Flood Zone and Real Estate Value (Passaic: insurance, how much, new house)

[Goldendoodle1969]

I know we've got some amazing real estate professionals on this board so I wanted to get your take on something.

My brother-in-law just got his house reassessed and the assessment is really high. He is contesting the assessment and considering options. Here s the situation:

He bought his house in 2005 in Passaic County, it was an estate sale. It was a 2BR 1BA. The house was basically a knock down. Instead of knocking it down he built a new house on top of the old one. He has since added a 2nd floor with 3 bedrooms and 2 baths, all unfinished. There are no fixtures in the 2 new bathrooms, only roughing is in and there is no heat set up for the 2nd floor. However everything else is finished(sheetrock, paint, floors, etc.)

From my understanding this means he is still technically in a 2BR 1BA home and the tax assessment should be based on that. Is this correct?

Another interesting fact is that his house is next to a river. His property is NOT classified as a flood zone however the river has severely overflowed it's banks twice in the past 5 years, surrounding his house in almost 2 feet of water each time. Apparently this is the first time flooding has happened in over 50 years. He has never filed an insurance claim for flooding and is not required to carry flood insurance. He actually never had any flood damage because he has managed to keep the basement with only a couple inches of water in it each time by using massive pool draining pumps hooked up to generators.

Obviously if he pushed to have his house classified in a flood zone or if it happened on it's own( by way of FEMA or other agency assessment) I'm sure it would have an effect on the assessed value.

I know it is much harder to sell a house in a flood zone, but how much harder? Also how much of a value hit does this designation typically put on a property?

Any professional advice is much appreciated and let me know if you need more information. Thanks in advance!

[cw30000]

Originally Posted by tdstyles

I know we've got some amazing real estate professionals on this board so I wanted to get your take on something.

My brother-in-law just got his house reassessed and the assessment is really high. He is contesting the assessment and considering options. Here s the situation:

He bought his house in 2005 in Passaic County, it was an estate sale. It was a 2BR 1BA. The house was basically a knock down. Instead of knocking it down he built a new house on top of the old one. He has since added a 2nd floor with 3 bedrooms and 2 baths, all unfinished. There are no fixtures in the 2 new bathrooms, only roughing is in and there is no heat set up for the 2nd floor. However everything else is finished(sheetrock, paint, floors, etc.)

From my understanding this means he is still technically in a 2BR 1BA home and the tax assessment should be based on that. Is this correct?

I am not professional, but base on the tax I see from my neighbors is that you bro in law should have knock down the house instead of adding an addition to the existing home.

I just going to use my home for example. The previous owners did what your brother did, and when the house was completed, the tax increased 50%.

The house right next to mine, same size lot, and a bit bigger house, knocked down the old home and rebuild it. Tax gone up just a tiny bit.

Both house work were done around the same time.

[Goldendoodle1969]

Thanks. I've heard arguments for both, but I thought the general consensus was that, unless there is a tax abatement, taxes on New construction are much higher than a renovation. Kind of a moot point though.