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Old 02-13-2012, 03:01 PM   #1
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How are building taxes calculated?

I want to put up a pole barn this spring. I called the township office. I asked what effect this would have on my taxes. She said "What is the value". I told her it would cost me about $8000.00 for a 30x40. She said, "multiply 1/2 of the cost by the millage rate, which will bring it to about $120.00 per year". I said, "So its the value that counts? Or is it also the size". She said, "Its the size". I asked her why she wanted the value then. She told that she has a calculator on the pc but she can not access it now and I should come in to talk to an inspector.

Sounds like crap. Whats the truth? I can by a cheap 30x40 for $5500 or a better 30x40 for $8000. but I bet I get taxed the same on either.

Or I can buy a good 20x30 for $5500 or a cheap 30x40 for $5500, but I bet they tax me more for the 30x40 than the 20x30.

So if I want less taxes, do I go for a smaller barn or a cheaper deal?


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Old 02-13-2012, 03:19 PM   #2
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Local rules trump all.
What is the township, state you are in?


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Old 02-13-2012, 03:24 PM   #3
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Figuring out taxes is more complex than relativity. At least that is what Einstein is reported to have said, and he was arguably the smartest man who has lived for the last 150 years.

I built a deck, and had the same question. I went into my local tax office, and asked them how they decided what my tax rate would be. The answer was that a deck receives a certain value based on its size in square feet, as determined (the size that is) by the building inspector. The deck could be made of solid gold or horse manure, doesn't matter, they have a magic formula for the value per square foot, and you pay tax based on that value. Sounds like you have the same deal in your town.
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Old 02-14-2012, 07:40 AM   #4
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In my province it is all based and assessed value of the property. They re-assess every three years based on market value.
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Old 02-14-2012, 10:53 AM   #5
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Out here, it is a combination of the size of the deck, and quality of materials used. The OP definitely needs to check with their local building inspector.
Pardon any typos, my IPad has a mind of it's own for spelling corrections!
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Old 02-14-2012, 11:02 AM   #6
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Originally Posted by joed View Post
In my province it is all based and assessed value of the property. They re-assess every three years based on market value.
That's how they do it here too. Assessed value = 1/3 of market value. Multiply that by the tax rate, and that's what you pay. So, in my area an $8,000 improvement would raise the assessed value by $2,666. Multiply that by my tax rate of 7.6632% = $204.35 per year.
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Old 02-14-2012, 07:09 PM   #7
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If you spend $8000 building a barn and your neighbor spends $20,000 having a contractor build exactly the same barn, both you and your neighbor will have added exactly the same value to your properties. Taxes are based on that value.


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