Many homes have untouched basements that often look unfinished, uninviting, and inhabitable, but it’s a perfectly usable space that can elevate your home-living in meaningful ways. It’s not for housing your HVAC system and hiding your clutter, but it can extend your entertainment area or serve as a productivity nook by incorporating some design elements to give the basement’s finish some much-needed finesse.
While it’s a wonderful idea to make the most of this underutilized space in your home, keep in mind that finishing a basement requires permits before you can proceed with making structural, electrical, or plumbing changes. Not to mention, the renovation project may also come with an unwelcome surprise: an increase in your property taxes.
Will Finishing Your Basement Increase Your Property Taxes?
Property taxes depend on the value of your home multiplied by your local tax rate. Assessing your property’s value refers to several factors, and the improvements you make will also leave an impact, which means spending thousands of dollars to finish your basement will skyrocket your property taxes too.
Assessment Methods to Determine Your Property Value
A county assessor from your state legislation will assess your property following either the market price paid or the fair market value. However, some states may require assessors to review building permits for heavy renovation projects such as basement finishing.
Calculating the exact cost of your property taxes after the basement renovation is tricky since the price varies depending on a range of factors, but you can get an estimate by factoring in the amount of work involved in the project so you can project your property tax.
This is a critical step that maximizes your investment and ensures it’s the kind of upgrade that’s worth your penny, especially if you have plans of selling the house in the future.
What Basement Upgrades Impact Your Property’s Tax Implications?
When it comes to working on your basement, it will be considered finished for tax purposes if it follows every requirement set by your area’s building code such as a complete electrical system, heating system, flooring, along with access to windows, doors, entrances, and finally finished ceilings and walls. Missing any from the list will constitute an unfinished basement, which means it won’t impact your property tax.
The Bottom Line: Upgrading the Visual Appeal, Comfortability, and Functionality of Your Basement Is a Worthwhile Investment
There’s no doubt that making expensive upgrades to your home can come at a hefty price long after the project is complete, but paying extra in property taxes is worth it if it means making parts of your home more comfortable, liveable, and functional.
Are You Looking for Handyman Services in Rockville, MD?
Your basement doesn’t have to feel dingy and dull, especially when Handyman of Rockville offers affordable basement remodeling services that can transform its drabness into a decorous space.
We are fully committed to providing home improvements that are as time-saving, affordable, and hassle-free as possible, so get in touch with us today to get a free estimate of your project.