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Old 07-16-2009, 08:54 AM   #16
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Originally Posted by thekctermite View Post
This cracks me up.

People do their own work and save money in the process. That's a good thing. If their work is on par with most contractors' work then the work the DIYer does should increase the value of the home the same as it would if a contractor had done the work. Makes sense, right?

Leoskee, I don't see why anyone could be suprised by the fact that the work you do in your house increases the taxes you pay on your house. Whether you do it for $500 or a contractor does the same project for $5000, the home's value is increased the same. People that want nicer modernized homes pay more tax than people that are living in less valuable homes...That's the society we live in and what our economy is (or was ) based on. People that want to eat a larger slice of the pie while paying for a small slice of pie do so on the backs of everyone else and that is a shame. It comes down to integrity...Some got it, some don't.

No argueing that! I completely understand the process but my problem is with the fact that they are adding to the cost of something that you are doing yourself. If a reno job costs 20K with a licensed contractor and you DIY for 10K, why should you have to pay taxes as if it job cost you 20K? I dont agree with that. Im sure no one does. So what I am trying to figure out is if there is a happy medium. A dollar amount that will not inflate my taxes unnecessarily.
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Old 07-16-2009, 09:09 AM   #17
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You're going to get taxed on the assessed value, not what the stated permit job cost. It's mainly the permit fees that the town is trying to drive up.
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Old 07-16-2009, 09:20 AM   #18
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The building permit should not be used as a "tax". I understand appraising a property accordingly for upgrades that is acceptable. That should have nothing to do with the cost of the permit! It is the appraisers job to calculate the value of the property not the building department. The building department is supposed to be responsible for maintaining the general safety of the public by enforcing the minimum (I have come across some inspectors who didn't know what they where doing) building codes, zoning laws, and local ordinances.

If you use it as way to boost revenue more and more people will stop applying for permits. This leads to the potential of more jobs being performed that do not meet minimum safety codes. This in turn will lead to endangering the public. KC please understand I feel very strongly about the need for the services provided by the building department, this is not an attack on them. I do not agree with using the building department as a way of boosting "tax" revenue as that is not what it was intended to do. If government in general would learn to be more responsible with the money they have they would not have to continually look for new and creative ways to tax the public. We are currently the highest taxed country in the world and receive the least amount of services for our tax dollars. We fought a war with England over these very same issues!

I apologize for getting political and realize this is not really the right place to do so. I felt it somewhat necessary to make my point.
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Old 07-16-2009, 11:03 AM   #19
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I'm with you ARI001, the building department shouldn't be in it to boost taxes. They aren't going to give out permits for less than they ought to though because they don't want to leave money on the table, understandably. I assure you that I often inspect homes that are listed on the permit application as costing $1,000,000 that actually get listed for two or three times that much as soon as they're finished. They're certainly not fooling me but it doesn't matter because our new construction and substantial remodels are permitted by square footage, not cost.

Not sure how it is elsewhere, but the County assessor has no interest in the valuation that the City gets on the permit. They often come by and look at plan files and they assess the value based on the project itself and take other properties in the area and other factors into consideration.

I'm in total agreement that high permit costs deter people from proactively following the law and getting the required permits. Costs should be kept reasonable and standardized (square footage based is a good way). There's a fine line between making the process easy and economical and making it effective. Nobody likes getting permits or inspections but it is in the interest of public safety, just like speed limit signs on the highway.
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Old 07-16-2009, 11:08 AM   #20
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Quote:
Originally Posted by Leoskee View Post
No argueing that! I completely understand the process but my problem is with the fact that they are adding to the cost of something that you are doing yourself. If a reno job costs 20K with a licensed contractor and you DIY for 10K, why should you have to pay taxes as if it job cost you 20K? I dont agree with that. Im sure no one does. So what I am trying to figure out is if there is a happy medium. A dollar amount that will not inflate my taxes unnecessarily.
As everyone has said
You are taxed on the value of the work completed - it doesn't matter who does it. Well, OK - it does. Work that is not quite "perfect" will add less value. As you improve your home the value goes up & your taxes go up. I have no problem with that, nor should anyone else

Example, 2 houses same size etc & everything
One has been renovated & is sold for $300k
The 2nd house someone buys for $150k & renovates DIY
Why should the 1st person pay 2x the taxes because they bought a house that was already renovated?

I bought my last house for $23,600 in '97, far less then what other houses were selling for. My 1st Tax bill was based on an appraised value of $70k
I thought it was great . I was able to get a loan & pay off my credit cards!! Just to be straight - I BOUGHT the house on 3 credit cards w/cash advances. My cousin - a banker - thought it was a riot

The permit fee IMO should not be based upon the cost of a Pro to do the work.
But every Town (I think) has the right to charge what they want for permit fees



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Old 07-16-2009, 11:09 AM   #21
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Quote:
Originally Posted by Leoskee View Post
No argueing that! I completely understand the process but my problem is with the fact that they are adding to the cost of something that you are doing yourself. If a reno job costs 20K with a licensed contractor and you DIY for 10K, why should you have to pay taxes as if it job cost you 20K? I dont agree with that. Im sure no one does. So what I am trying to figure out is if there is a happy medium. A dollar amount that will not inflate my taxes unnecessarily.
So if you were to sell your home would you value the addition at the $20,000 that a contractor would've charged you or would you pass along the $10,000 savings to the buyer since you DIY'd it? See where I'm going?

Taxes shouldn't be based on the cost of the work. We agree on that. Taxes are based on the value of the finished product, not the value of the work that goes into getting the product finished.
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Old 07-16-2009, 01:21 PM   #22
 
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thekctermite has it right. I work in a tax assessor's office and we see this situation occasionally. Someone will build their own house themselves and want us to appraise it for what it cost them to build it (usually many thousands of dollars less than a home builder would charge). We can't do it, our state law says we have to appraise it within 10%+- of the value that comparable homes are currently selling for.
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Old 07-16-2009, 01:23 PM   #23
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Quote:
Originally Posted by thekctermite View Post
So if you were to sell your home would you value the addition at the $20,000 that a contractor would've charged you or would you pass along the $10,000 savings to the buyer since you DIY'd it? See where I'm going?

Taxes shouldn't be based on the cost of the work. We agree on that. Taxes are based on the value of the finished product, not the value of the work that goes into getting the product finished.
The permit should be based on the cost to do the project. Trade labor is obviously going to add substantial cost. He is not using trade labor therefor the cost of trade labor should not figure into the cost to do the project.

The taxable value after the job is complete is another matter entirely. He should pay taxes on the increased value of the home. My issue is the locality using the permit to generate revenue based on figures that do not exist. I don't think the locality is going to let him write off the time he invests in doing the project off of his taxes. Therefor as far as I can tell he is volunteering the labor, thus no labor costs.

The more difficult or unfair the permit process becomes or seems the less people who will bother with it. Why penalize someone for trying to do things the right way? By doing so, it only increases the chances the person will not do it the right way the next time.
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