I real estate agent told me that she bought her new house with very few upgrades. Reason- she did not want to pay taxes on her upgrades, as they raise the final price of the home. Therefore, she bought the basic house and planned to remodel her kitchen and add wood floors -later

That is great advice, thank you

They get you any way with the up grades. When they apply for a permit for home improvement it increases the market value of your home and increases your taxes. Unless you don't get permits.

One does not need a permit to buy a new stove, refrigerator or dishwasher!

This could help

https://www.investopedia.com/articles/tax/09/calculate-property-tax.asp

However, it's valuable to know that living in an unincorporated area rather than the city proper will usually result in lower property taxes.

Get the information you are seeking from the assessor's office in the location you plan to build. All we can offer is conjecture based on the state/county/town we are living in

Upgrades effect taxes? Where do you guys live?

The village appraisal company doesn't even come in to see what you have. Its based on land/subdivision type, age, structures, house type and above grade square footage.

whaas_5a In MA when you get a permit the town assessor's office sends an inspector to inspect the project and YES property taxes are affected by bettering your home

I suppose every tax assessor/district will be different, but in many cases property taxes are based on the exterior of a house, plus it's square footage. In many districts, an assessor may not go inside a residence unless permitted by the owner.

There's various threads on this subject, and the conclusion many draw is to keep their exterior plain, simple and never upgrade, while doing all sorts of upgrades on the interior.

Since property taxes in some states can easily exceed $20-$30,000 USD, property taxes may not be insignificant.

In CA there are some incentives for energy passive and green design. Also tax breaks for solar. And sometimes for using certain recycled materials. Otherwise, since this will be new construction, there will only be assessment history on the land, so it would be the cost of the land plus the cost of the improvements.

We added a guest house to our property and the ink on the certificate of occupancy wasn't even dry when the LA County assessor knocked on our door. I told him that they had all our contact information on the permits and that just showing up was not acceptable and he could call and make an appointment. Not a good time for me and closed the door!

People must avoid the assessors calls and/or letters, so they figure they'll try to ambush you at home!

our taxes are based on appraised value, which means that the sales prices of adjacent properties and what is known about size and location factor in. obviously, they don't know if you have a 2-year-old or 20-year-old kitchen, but they get into the ballpark, and they go up with gentrification of the neighborhood. square footage of an awning would never factor in...

Don’t build a home is the easy way to avoid taxes. Taxes are inevitable.

You will come out much further financially renting and investing in the stock market. But most people don’t want to do that, and accept the inevitable loss. It’s the same with taxes. That’s part of owning a home.

Can't comment on what would be specific taxes for OP since it is completely a local issue. Discuss with a real estate broker or someone versed in real property tax law.

At least in Los Angeles, one is reassessed when one improves existing property. When a permit is pulled one puts in an estimate of the cost. Although one can lowball a bit, it still has to be more or less realistic in terms of the scope of the improvement.

One then receives a questionnaire from the County (or City) regarding exactly what changes were made.

I am still going through the process but my understanding is that there is differentiate between a replacement and a completely new item. Therefore replacing a dishwasher wouldn't trigger a new assessment - and yes, a permit would be pulled for a dishwasher if one has it installed through the store as mine was but it didn't impact my tax base.

I really don't know how it shakes down though in terms of a completely remodeled kitchen which is what I am doing since it is technically a replacement for a kitchen but still will impact the FMV of my home. I have been told that after one receives the new assessment, one can fight it so I'll cross that bridge when it happens. So far, they managed to send the questionnaire to my neighbor so I phoned them and told them I wouldn't send in any information until they sent a form that was addressed to me as the owner of the property. For whatever reason, this poor woman has been sent other official documents. :-)

So here's a funny thing. Our last house, we were looking for ways to reduce our property tax. We compared the listing with the assessment, and noticed that the listing called it a split-level, while the assessment called it a tri-level. We wondered what the difference was and called our assessor. He explained the difference, we said well, we think we have a split, not a tri. He sent someone over the next day to take a glance, said yep, it's a split not a tri, and boom, our bill was $100 less. Crazy, huh? So build some of your house below grade, at least in our county.

Don't finish the basement.

And, according to the anti ads for our gubernatorial candidate, remove the toilets, rendering the house uninhabitable.

Interesting to hear how different jurisdictions handle this. Ours is primarily based on square footage, but the house is also given a class rating. You can also have different class ratings for different parts of the property (heated v. unheated space, for example). The taxes are calculated by using a multiplier based on class with the square footage. We're still trying to figure out how the class is assigned, given that they may never see the inside of the house.

Cross your fingers and disguise it as a garden shed or garage. (I once toured a house with an attached double garage converted to a beautiful cathedral-roofed family room whilst the vehicle doors remained fully intact at the front.)

Locally, house square footage, yard size, number of bedrooms(sewer tax in based on that), and comparable houses in the neighborhood. Oh, in ground pools and large decks/patios add to the total.

My assessor said bedroom and bathroom count will be the largest factor other than square footage. Half of our finished space will be in the basement, so it will be valued less than the main floor. Since we own the land and won't be buying the completed house from a builder, the assessor has no idea how much we spend on appliances, etc.

Here's my advice- when the tax assessor shows up at your house, invite him in and offer coffee. Be as nice as you can be. We have done this in NJ (where I believe the property taxes are the highest in the country), and the assessors have bent over backwards to help us. I think they are used to being abused by homeowners so the change is nice!

Whaas.... A new home can be the basic builder home or it can have upgrades. The upgrades can be from a predetermined builder's selection, or you can pay extra for the upgrades you desire. Upgrades will increase the finished home's price. Taxes are determined by the sale price/ market value of the home, plus the land value.

Re: Home Value

We bought a short sale home at a price of less than half of its original sale price- new. When we were ready to sell it, website RedFin foolishly assigned their value of the home as the short sale price. Their home value algorithm looked only at the last sale price in determining home value, which failed to account for short sales and resales, not actual value. So, when the housing market value increased, their algorithm was way way off target. Just a little FYI at resale

Anyone that is paying real estate taxes on upgrades (ie floor to ceiling natural stone fireplace vs a standard height tile fireplace) should meet with their local officials. Should be based on square footage, comparables, bedrooms etc. At least that is the case in SE WI.

I appealed my accessed value based on comparables. When meeting with the accessor he oddly stated my home was architecturally more interesting. I stated thank you, but that is completely subjective so unless you have data that shows I'd get more value for the look of my house vs a similar house next door than you better make them comparable. He dropped my accessed value and it saved me $300 annually.

Our last house was 3500 sq ft above ground (one floor) with 3 bedrooms plus a nicely finished basement. In our area they do not care what is below ground. Our taxes were lower than all of our neighbors with a large 2 story space above ground.

someimes I can’t believe we sold that house.

Post and pier pole barn construction with gravel floor is not taxed in our jurisdiction until you add a concrete floor. So build your fully insulated 40x80' building and park your RV inside. Taxes on the land only which you can farm.

Can also be built on a foundation wall. Here.

It's all a trade-off. Sure - build a house in an unincorporated area or rural area, and the taxes will be lower. But there will usually be no sewers, no town water, and electricity will have to be brought in from the road. Oh - no natural gas, either (thought this can be true right in the middle of an older suburb - think Gold Coast of CT!).

Most people buying houses either have children, will have them, or will someday sell to someone with children, so often the biggest deciding factor is schools. Is the house in a desirable school district? If it is, taxes will often reflect this, but they will be a LOT less expensive than 12 years of private school tuition for multiple children.

Choosing a location to live based on property taxes is not necessarily a bad idea. In the Tri-State are outside NYC, NY house prices are lower - more house for the money - but their property taxes are exorbitant. It's not a bad commute, though. Westchester County NY, has houses that are less expensive than neighboring CT, but the commuting may be longer, and the taxes are absolutely higher. Public schools are not as good, either. CT has the highest housing cost, but good commute, lower property taxes than NY/NJ and good train service into mid-town Manhattan. Most of the towns have outstanding public schools as well.

Or one can just move to a LCOL part of the country but understand that salaries will also be lower. As I said - it's all a trade-off...

As others have said, how property taxes are figured varies greatly from state to state, and in some places county to county. You are best off figuring out with the tax assessor how they figure taxes on new construction to begin with.

In our area for instance property taxes are intended to align with the resale value. As houses sell, the assessed value of these houses and their neighbors is adjusted to reflect the market value. For new houses, they estimate a market value based off of a series of factors and calculations. Ground floor square footage is assigned a per square foot value based on the construction type; second floors and finished basements are assigned a value half that of the first floor. Finished attics are assigned 1/4 of the value of the first floor. Features like extra plumbing fixtures, fireplaces, patios, and porches add value. Then an architectural factor is applied to the house based on it's condition (would be an A if brand new) and it's general quality of materials. Lastly the value is multiplied by a location factor based on neighboring sales and construction costs and added to the value of the land.

So as you see, this is a very complex and location specific method for determining taxes. There's really no way for certain to know what construction decisions could decrease taxes without talking to you assessor's office.

oh, I will note that when my parents built, they were as vague as possible about their interior finishes in the set of drawings that they submitted to the county as possible in an attempt to keep the assessed value down.

Is it time to suggest that there are many criteria for the design of a new, custom home or a remodel? That list begins, IMO, with a new home or remodel which will lift living to a new, invigorating and rewarding level, i.e., the opposite of seeing a new design as simply shelter to keep the rain out.

IMO, designing to reduce property taxes may be at the bottom of the list when it comes to designing a new custom home or remodel.

There are so many more criteria for design than this.

growing up, a family in our town lived in their finished basement that had no house above it. don't do that.