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Will My Property Taxes Increase If I Remodel My Home?

November 6, 2012 by burgins

We all know that somewhere, some way, the government always gets their “cut”. From income taxes to sales tax it seems that nothing is untouchable anymore. So, it stands to reason that anyone considering home improvements will wonder what those improvements will do to their property value and, eventually, their property taxes.

property taxes and remodeling

We’ve Done The Dirty Work For You…

Seeing as how this type of information is often hard to find, and even more often hard to understand, we have decided to do the dirty work for you. We’ve researched what types of home improvements are considered “taxable” and which are not. The information below comes directly from the Orange County, CA Office of the Assessor and is a handy homeowner’s guide to how remodeling may or may not affect your property value:

New Construction is Taxable – Typical Maintenance & Repairs Are Not!

  • -New construction is taxable, but does not trigger a reassessment of the entire property.
  • -Only the market value of new constructions is added to the existing Proposition 13 value.
  • -New construction is subject to a one-time supplemental assessment.
  • -Maintenance or replacement of existing items is not taxable.
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Filed Under: Ask the Expert

5 Essential Questions to Ask When Buying a Home

August 22, 2012 by Derek Smith

Buying a home is one of the most significant purchases you can make in your life, one that requires a great deal of thought and consideration. Therefore, you should be going through all possible questions before you make the final decision. However, what are the most important questions you should be asking yourself? What do you need to know before you become a homeowner? The following are several essential questions to go through before you buy your potential new home:

Is it Scalable to your Needs?
When considering between different homes, you should look at both your short and long-term needs. Think carefully about where you see yourself in the next few years. If you plan to get married and have children in the future, then you may want to purchase a home that accommodates this need. Even if you see the possibility of starting a home business or owning a pet, you’ll need to consider whether your potential home has the space for these circumstances.

How Long Will You Live There?

While you may be purchasing your home with the long-term in mind, there‘s no certain way to plan for the future. Situations such as a family emergency or job change can have you departing your home sooner than you think. But depending on the mortgage you sign, you should plan to stay in your new home for at least 5 years. Breaking the mortgage sooner can lead to financial consequences, in addition to the risks of selling the home for less than its actual value.

What’s the Condition of the Home?

One of the most important tasks any potential homeowner should undergo is an in-depth inspection of the house. Ask the realtor if the house has passed all inspections, and if necessary, conduct several on your own. Make sure that you’re completely satisfied with the condition before considering to purchase the house. If you find any risks or damages after the contract has been signed, you may have to pay for it on your own.

Can you Bear the Responsibility?

The decision of owning a home doesn’t end when you sign the contract. Homeowners have a great deal of responsibility when it comes to managing and maintaining a home, such as insurance, homeowners fees, taxes, and so on. In addition, you’ll also need to keep in mind the costs of maintenance and repairs when appliances break down or the power goes out. You won’t be able to go to a landlord or property manager to handle your problems – more likely, you’ll be on your own.

Do You Have Enough Finances?

While this seems like a relatively basic question, the importance of understanding your financial situation can be overstated. In general, you’ll want at least 25-35% of your pre-tax income to allocate towards mortgage payments, which can take years to pay off. Therefore, you should think carefully whether you’re able to realistically make the decision. The risks of being unable to pay and possibly losing your home can have dire effects, so make sure you carefully consider whether you purchasing is the right choice.

Photo Credit: freshome.com

Christine Cooney is a writer at The House Designers, writing articles on DIY and home improvement on The House Designers blog. She loves learning about architecture, gardening, and home decor.

Filed Under: Ask the Expert Tagged With: questions, real estate

10 Questions to ask your Builder or Contractor

February 12, 2012 by Miguel

If you are considering hiring a contractor to work on a new house or with plans for your budget home renovation, you’ll want to ask several questions before signing a contract. For one thing, you need to know what to expect. You’ll also want to interview several contractors in order to get the best work at the lowest price. Make sure you are satisfied with the answers to the following list of questions before making a commitment.

1. Do you hold a contractor’s license? If your locality requires that contractors be licensed, then ask to see the contractor’s license. A licensed contractor must meet certain requirements to obtain the license, generally providing you with the assurance that he or she is capable of completing the work.

2. Do you carry liability and workers’ compensation insurance? Make sure the contractor has liability insurance and carries workers’ compensation insurance on employees. The last thing you need is a worker getting injured while working on your property and wanting your homeowner’s insurance to pay for those injuries.

3. Will you obtain and pay for all necessary permits? As a general courtesy, most contractors will take responsibility for obtaining the necessary permits and will include the cost in their bids.

4. Will you give me a detailed written estimate? Get everything in writing, including all of the minor details. You don’t want to accept a verbal bid and then have the contractor come in with his crew and say, “That’s not what I said.”

5. Will you perform the actual work? A lot of contractors subcontract their work. They may farm out plumbing, electricity, or some other major aspect of the job. You’ll want to find out who the subcontractors are who will be working on your house plans. This way you can check their reputations with the Better Business Bureau.

6. Will you get lien waivers from suppliers and subcontractors? Make sure your contractor is willing to provide you with lien waivers from his or her subcontractors and suppliers. These waivers will prove that everyone was paid via the money you paid the contractor.

7. Will you sign a written contract? The estimate is not a contract and cannot be viewed as such. Get a written contract from the contractor that details everything in the estimate. It should include the work to be performed, payment terms, an estimated date of completion, and instructions for incorporating necessary changes.

8. How will you handle necessary changes? Seldom does a homeowner get through a home renovation process without changing the original plans. If changes are to be made, make sure they are put in writing and include the price of the changes.

9. What is the payment schedule? The contractor may ask for a down payment, which should not exceed 50 percent of the total cost of the project. Do not pay a contractor in full at the start of the project. If the work will take months, arrange to pay the contractor over the course of the project.

10. Can you provide references? Ask the contractor to provide you with the names and phone numbers of former clients. Be sure to call them. If possible, drive by and look at some of the contractor’s completed work.

These basic questions will help you avoid the situation where work is completed  but does not satisfy your expectations, or if there are any disputes about payment or what work was agreed upon to be completed.  Unfortunately there are many unethical and unscrupulous construction organizations that can and will take advantage of unsuspecting homeowners.  You can avoid these situations by performing your due diligence as you evaluate potential service providers.

Filed Under: Ask the Expert

Lining your oven can void the warranty

October 11, 2011 by Derek Smith

Consumer Reports carried an interesting story today about how
lining your oven can void the warranty.

From the article,

Lining the oven bottom with foil can void your warranty if the manufacturer advises against it in the manual or has stamped the warning on the oven cavity. This applies to gas and electric ranges. So even though reading the owner’s manual can be a snooze, we recommend it.

It is important to recognize how a seemingly simple approach to save a few minutes cleaning up after baking can have significant long term impact on the warranty coverage of your costly appliances.  Most modern ovens have ‘self-cleaning’ features that eliminate the need to provide your own method for reducing the cleanup effort.

If you are baking something that you are concerned may spill over, Consumer Reports suggests putting a baking sheet on the rack under your baked item.

Filed Under: Ask the Expert

Top 6 Home Improvement Service Calls

September 6, 2010 by Derek Smith

If you are trying to improve your home to sell it, or just make it more enjoyable or functional, you always hope that you’re getting a good return on your investment.  A recent survey from home improvement website ServiceMagic reveals what projects homeowners are doing the most frequently based on requests for the services of Contractors and professionals.  Have you embarked on any of these?

Top Increases in Service Calls since Q2 2009

  1. Kitchen Remodeling (up 93%)
  2. Windows (up 81%)
  3. Air Conditioning (up 55%)
  4. Hiring a Cleaning or Maid Service (up 53%)
  5. New Cabinets (up 20%)
  6. Hiring a General Handyman (up 19%)

Want to see what else made the list? Check out the full Home Remodeling and Repair Index survey results.

Filed Under: Ask the Expert

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