House Design and the Tax Man

The Tax Efficient House

Do you know how the taxes are determined on your home, or the one you plan to build? It might be a good time to investigate before you build that new home or start your home search for a ready-built. It’s true that if it’s a ready-built, you have more limitations on what you can do to influence the taxes, but for a new-build you have many options to limit your taxes. In the process of doing this you can also influence your overall costs downward and still have a very functional and enjoyable home.

Perhaps you could start by obtaining a copy of the appraisal manual used in your city or locale. Examination of the factors used in arriving at the appraised value of the existing home or planned home can give clues as to where costs can be reduced but functionality maintained. This exercise can point out where tax costs can be reduced on planned renovations of existing homes, and can influence choices made for new builds.

Keep in mind that the most inexpensive (or cheapest) house design is a square box or rectangle. Each turn, alcove, offset, or other irregular feature adds cost in terms of construction time, lumber and other materials waste, and loss potentially of sale value because of undesirable features in the eyes of other buyers. However, the tax appraiser will view these features with a different perspective. The features add cost, and thus, increase the tax base. That architectural roof will have the same result when compared to a regular grade roof. Those special windows that you may be pressured to use will also cost more to use them, increase the contractor’s profit, and increase the tax base. However, the special windows probably will not perform as well as normal windows with storm windows. If the manual used to determine the “R” factor (insulating factor) is consulted you may find that the value is equal to or greater for the normal window and storm window combination. They will cost less, last longer, and cause fewer problems – and the tax man will collect less. There are many other possibilities including doors, floor coverings, fixtures, etc.


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