MarketWatch residential real estate correspondent Amy Hoak takes a look at the tax (reassessment) implications of various home improvements, policies some local and county governments may want to examine for how they may discourage the economic impacts of remodeling.
Hoak writes that demand for remodeling is trending up sharply, and that many people are surprised to learn that adding value to a home with a renovation project may well have implications at the tax assessor's office. She writes:
Adding a new wing to a home will most likely increase your property taxes. But so will finishing space that you already have, such as an attic, garage or basement.“Anything that increases the square footage of the living space is likely to increase the value of the home, and therefore the assessed value,” said Tom Shaer, deputy assessor for communications with the Cook County Assessor’s Office. Your value would likely increase if, say, you finished the attic with walls and flooring, as well as heating, ventilation and air conditioning systems (HVAC), to create a couple of bedrooms and a bathroom, or if you finished the garage, creating a family room. It probably would also increase with a finished basement, though at a different rate than above grade areas of the home (unless a separate-entry apartment is created), Shaer said.