Renovations may affect your tax assessment!
Home renovations can affect your NJ property tax amount if you have added livable square footage to your existing home. For instance, if you completely finsihed a basement, added an addition or added a bathroom or bedroom to your property. If you’ve used a reputable contractor that pulled the proper permits for these improvements then just know that when those permits are closed the town may decide to reassess your home value.
What is an assessment?
Simply put, this is what the town thinks your home is worth and what you’ll be taxed at.
How does this affect your nj property taxes?
Each town is different, and not every town may decide to pursue a reassessment. But it happens quite a bit in NJ, and you should be prepared. If you do get reassessed at a higher value, your taxes will most likely go up. The reason being because annual taxes are calculated by multiplying your homes assessment to the towns tax rate.
Should you not improve your home?
I don’t want to scare you, most renovations do not require permits and will most likely not have an impact on your taxes. If the work is purely cosmetic, such as renovating existing bathrooms & kitchens, then you have nothing to worry about. If you are replacing utilties like hvac, roofs, water heaters, these usually are not going to lead to a higher assessment.
You should only be concerned with this ONLY IF YOU ARE ADDING LIVABLE SQUARE FOOTAGE to your home.
Examples:
- adding a bathroom that did not exist before
- adding a bedroom or living space
- fully renovating a basement
- fully renovating an attic space
Conclusion
Hopefully this helps clarify the how some home improvements can affect your property taxes in NJ. If you have any questions at all. Feel to reach out to me, I am here to help and to be a resource for you. Serving Northern NJ, Morris county & Essex County!