You’ve finally gotten around to the remodeling project you’ve been dreaming up for years. Maybe you’re adding a room, building a deck, redoing all of your cabinets, or upgrading your master bathroom to a mini-spa.
Before you install that whirlpool tub or tear down that wall, it might be a good idea to sit down and budget in the property tax increase that you’re likely to see from your hard work.
”I didn’t think of that”
Many homeowners don’t consider the additional taxes that follow home renovations, which can be fairly steep, depending on the nature and scope of your improvements. All things considered, it makes sense—as your property goes up in value, property taxes follow suit.
Failure to budget for the inevitable tax increase is where some people receive a surprise later on, so it’s best to be prepared.
Of course, where you live matters. Some cities include most renovations in their assessments, whereas others, including Chicago, don’t reassess in many cases if it’s just part of the already-existing living space.
Chicago homeowners do need to consider property taxes for renovation projects that add onto the square footage or increase the number of people who can live in the home. Finishing an attic or a basement, for example, would likely trigger a reassessment.
What if you’ve done your homework and still get a surprise?
In some cases, you might feel like your property tax increase was unwarranted or unjust. Perhaps your renovations triggered a reassessment even though the guidelines you read told you otherwise. Now you’re on the hook to pay more in taxes for a renovation that already cost you a lot of money.
It’s possible to challenge your property tax increase in court, provided you can prove that your renovations didn’t fall under reassessment criteria. That’s why it’s important to always do your research before undertaking a big home improvement project.