One of the questions we sometimes hear at our Lodi, CA remodeling company is this: “What home improvements increase property taxes in California?” Many people wonder about this because they’re trying to find a happy medium between upgrading their home and having to pay more taxes.
The good news is that when a home renovation leads to an increase in property taxes, it’s generally because your home’s perceived value went up, too. Now, would you avoid remodeling your home simply because you want to pay less in taxes? Probably not. The added value of more space or upgraded amenities for your family might far outweigh any additional amount you have to pay in taxes. Understanding the implication of home improvements on property taxes, however, might help you prioritize your spending. This is especially true if you have multiple remodeling projects in mind or if you think you might move soon.
Today, we’ll walk you through some of the types of improvements that can increase property taxes here in California. Then, we’ll offer a few suggestions for ways you can still get the upgrades you want while minimizing their financial impact.
Types of Home Improvements That Increase Property Taxes In CA
In general, if your home remodeling project involves getting a building permit, there’s a good chance that your property taxes may increase when the project is complete. That’s because most local assessors get copies of such permits. This notifies them that improvements are being made and may trigger a reassessment of your property’s value. When that value goes up, so will your property taxes.
Home improvements that often result in increased property taxes include:
- Room additions
- Kitchen remodels
- Bathroom remodels
- Whole house renovations
- Swimming pool installations
- Additions of accessory dwelling units
- Garage installations
Smaller improvements such as repainting a room or replacing kitchen cabinets do not typically raise property taxes. On the other hand, there may be some larger projects that require a permit but may be exempt from additional taxes. If you’re ever unsure what implications a planned improvement may have on your property taxes, it’s best to consult with a tax professional in your area.
How to Get the Home Improvements You Need While Minimizing Their Impact on Property Taxes
Now that you know what home improvements could increase your property taxes, let’s talk about ways to maximize your home’s value while managing your tax obligations.
Pay attention to local rules and regulations. Property tax laws and guidelines can vary from place to place, even within the state of California. When you understand the rules and regulations that govern your specific area, you’ll be better equipped to make informed decisions about your remodeling projects.
Consider remodeling in phases. Let’s say you want to remodel your entire home. Work with a trusted remodeling professional to see if it would make sense to complete the work in phases. This not only spreads out the overall cost but it could also allow for more gradual changes in property taxes.
Get a remodeling quote and work with a tax professional. Determine what your remodeling budget is and then work with a professional remodeling company to see what can be done within that budget. Once you have a project total, talk to your tax professional. They can provide valuable guidance on how to minimize tax impacts.
Use exemptions and tax credits to your advantage. Some home improvements may be exempt from triggering a reassessment in your area. Find out what those are and if your planned project qualifies. You can also look for tax credits that could potentially lower your tax liability.
Professional Remodeling in Lodi, CA
At Schatz Construction & Restoration, we’re committed to providing the best construction, remodeling, and renovation services for homeowners in Sacramento and San Joaquin counties. While your tax pro can help you decide how home improvements will impact your property taxes in CA, we’ll help you maximize your home’s value with award-winning design and high quality craftsmanship. From kitchen remodels and bathroom renovations to additions, new construction, and outdoor living remodeling, we’re YOUR source for remodeling and construction expertise in the Lodi, Stockton, and Modesto, CA area.
Contact us today to learn more or to request a quote!
