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Old 01-04-2013, 03:50 PM   #1
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How to build a garage without hurting property taxes?


Here is the problem, I need a building permit to build a garage. I could just do it and hope no one notices, but that seems like a bad idea.

Question is, how can I add a garage without making my property taxes go up very much? What if instead of a "garage" I added a "barn" or a "workshop" - I just need a big building with a concrete floor, it can look like anything.

Will my house as a whole be reappraised, or just the garage? I actually have water damage, half torn-out walls, a half-replaced roof, ect. I'm thinking if I don't fix anything before the garage goes up, my house might not appraise any higher than when I bought it.

Can someone one kind of explain the process? My property taxes are great, but I need a large building to start a business.

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Old 01-04-2013, 03:58 PM   #2
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How to build a garage without hurting property taxes?


#1 go back and add your location to your profile!
Trying to "get around" this is going to bite you in the butt.
If your required to get a permit in your area and you chose not to they can put a stop order, or even make you tare it down. Not worth even trying to do it.
Your going to need at least a building permit and electrical permit.
All of it can be deducted if it's a business.

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Old 01-04-2013, 04:02 PM   #3
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How to build a garage without hurting property taxes?


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Originally Posted by joecaption View Post
#1 go back and add your location to your profile!
Trying to "get around" this is going to bite you in the butt.
If your required to get a permit in your area and you chose not to they can put a stop order, or even make you tare it down. Not worth even trying to do it.
Your going to need at least a building permit and electrical permit.
All of it can be deducted if it's a business.
Yeah, I'm planning on getting a building permit, my question is, how can I get a building permit AND minimize how much I'll pay.

Like, if building a garage adds $20,000, would building a "barn" add less money?

Big thing I'm concerned with is whether the new tax rate is based on the new total value of everything, or just the garage.
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Old 01-04-2013, 04:13 PM   #4
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How to build a garage without hurting property taxes?


Please do as Joe said....add your location....where you are is a big factor...

I live in California...built a 1040 sq ft garage (2-story).....it added $28K to my tax base.....and I got $8K credit for the one I tore down.

For the most part, it's going to be appraised according to use....but this will also be a big variable depending on where you live....

Believe it or not...your house can look like crap inside....and the value will be the same as a perfect one next to it...assuming it's the same size.

Your best bet...build it to code....just don't add anything to it to make it look like it's more than just a garage (no lift) until after your final inspection. Typically, once the final inspection is done, it triggers the property appraisal...the longer you put off the final inspection...the longer you delay your tax increase.

But be careful...depending on your city, your time between inspections has a limit...here in CA, it's 6 months...if I go more than that, they 'could' force me to re-apply for permits....I've gone a year and they didn't sweat me on it...
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Old 01-04-2013, 04:17 PM   #5
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How to build a garage without hurting property taxes?


Quote:
Originally Posted by tibberous View Post
Yeah, I'm planning on getting a building permit, my question is, how can I get a building permit AND minimize how much I'll pay.

Like, if building a garage adds $20,000, would building a "barn" add less money?

Big thing I'm concerned with is whether the new tax rate is based on the new total value of everything, or just the garage.
Ayuh,.... 'round here it goes on covered square footage, regardless what Name ya hang on it,...

garage, barn, workshop, dog house,... Don't matter...
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Old 01-04-2013, 04:22 PM   #6
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How to build a garage without hurting property taxes?


this only applies to structure, not something like a new patio in the back right
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Old 01-04-2013, 04:37 PM   #7
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How to build a garage without hurting property taxes?


It's a location thing.
My dad was being taxed for a $500.00 for an "out building" I checked it out and it was a 10' long dock I had built him for free.
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Old 01-04-2013, 05:15 PM   #8
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How to build a garage without hurting property taxes?


Watch out for google earth!
Local tax guys here use it to find this sort of thing.
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Old 01-04-2013, 05:22 PM   #9
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How to build a garage without hurting property taxes?


Ya that Google earth is funny. I was trying to get a permit to build a 2 story garage with what looked to me like a drainage ditch right behind it that drained in to the bay.
With the bay act no ones suppost to build anything within 100 ft. of any body of water in my area.
The stream was not on Google so they gave me the permit.
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Old 01-04-2013, 05:43 PM   #10
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How to build a garage without hurting property taxes?


In my area our taxes are assesed based on house size, age, Number of bedrooms/bathrooms, fireplaces, size of garage (1 car, 2 car, etc). Unfinished basements are not taxed, as well as porches. There are some other minor things on the list that I can not recall right now. Comps are done based on values of similar houses sold in the area. I was fortunate that my taxes went down last year by a few dollars due to the fact that one of the houses mine was comped to on the county appraiser web site was sold for less that appraised value.

I know property taxes are a sore subject for most people but, that is how your comunity is funded. What they do with that money is not for this forum. Trying to evade paying your fair share is only going to put the burden onto your neighbors.

Back in the 70's a gentleman in my small town bought a house that at best could be called a shack. It was about 500 SF and basicaly falling down. Over the ensuing years he rebuilt the house, carefully doing some carefully planned additions without permits of any kind. When he was done the house was a beautiful 3 bedroom 2 bath ranch style house with a nice two car garage. He managed to do this over the course of about 10 years and because we had a very part time building inspector and code office the guy never got caught.

About 5 years ago the town decided that it wanted to go to 100% assesment. A questionaire was sent around to all homeowners asking simple questions about the inventory of the house (rooms etc). most everyone filled them out and returned them. The next step was to have the company doing the reval go around and measure all houses exterior dimensions. Court orders were granted when needed. This was all very non intrusive and most people did not even know it had been done.

Anyway, the guy with the shack refused to fill out the questionaire or allow the people onto his property. A court order got the measurements and a calculation was done to determine the inventory. His prior full value assesment was about $15,000. his new assesment went to over $125,000. On court day when he went to fight it not one person in the comunity felt bad for him or would defend him as we all knew we were paying his share of the taxes and in effect he was ripping us off.
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Old 01-04-2013, 06:45 PM   #11
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How to build a garage without hurting property taxes?


Some places will allow a temporary building with no permit. Many people here build sheds and garages with railroad ties as the foundations so they can supposedly be moved. Some here were built 20 years ago as temporary structures. Also, those metal carports that are "temporarily" fastened to the ground are not required to have a permit.
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Old 01-04-2013, 07:01 PM   #12
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How to build a garage without hurting property taxes?


Quote:
Originally Posted by tibberous View Post
Here is the problem, I need a building permit to build a garage. I could just do it and hope no one notices, but that seems like a bad idea.

Question is, how can I add a garage without making my property taxes go up very much? What if instead of a "garage" I added a "barn" or a "workshop" - I just need a big building with a concrete floor, it can look like anything.

Will my house as a whole be reappraised, or just the garage? I actually have water damage, half torn-out walls, a half-replaced roof, ect. I'm thinking if I don't fix anything before the garage goes up, my house might not appraise any higher than when I bought it.

Can someone one kind of explain the process? My property taxes are great, but I need a large building to start a business.


The answers you need are at your local municipality office. Just sashay yourself down to Townhall and ask what the specific by-laws and tax rates are. No need to even give a name or address, you're just asking in general.

As a Realtor I ask these kinds of questions all the time. Most people are pretty friendly and just want to help.

Also not sure about other posters area, but in the RE world a property tax assessment is done by the governing body that sets tax rates. As Dawg says they may not even come in and they don't nessessarily care about the state of the interior.

A property appraisal is performed by a licensed appraiser who has been hired by the bank for lending purposes. They go through the entire place and things like a new roof, quality built in appliances, and interiour finishes, ect. make an impact on the final value.

Another reason to make sure your permits are in place is for re-saleablity.
I always ask for permits for added structures, septic approvals and so on. You don't want it to be a deal breaker when the time comes.

Federer asked about a patio out back. In my area anything poured concrete, like driveways or patios affect the tax assessment.
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Old 01-04-2013, 07:34 PM   #13
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How to build a garage without hurting property taxes?


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I know property taxes are a sore subject for most people but, that is how your comunity is funded.
I don't mind property taxes, but I think they should only reassessed when a new house is built or the property is sold.

The reason is simple - if I buy a new car, my property tax stays the same. If I buy a boat, or a computer, or anything else, I don't have to pay the government upkeep - so why does building a garage, or replacing my sliding with brick, cost an ongoing amount?

The other reason I don't like it is that, I'd like to eventually retire, and the way it's setup now, if you invest your money into your house you can essentially make it too expensive to live in.
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Old 01-04-2013, 07:40 PM   #14
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How to build a garage without hurting property taxes?


I like my property to be assessed every year, plus it is state law!
My taxes are now 1/4 what they were 3 years ago, plus it helps me decide if I want to sell or not.
Of course, my value has dropped to half what it was 3 years ago.
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Old 01-04-2013, 07:45 PM   #15
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How to build a garage without hurting property taxes?


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I like my property to be assessed every year, plus it is state law!
My taxes are now 1/4 what they were 3 years ago, plus it helps me decide if I want to sell or not.
Of course, my value has dropped to half what it was 3 years ago.

Not sure about your area, but around here true property values and assessed values for the purpose of tax are very often very far apart. As Realtors we hold little value in them when offering an opinion of value for the purpose of sale.

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