I own a home in Connecticut. I'm currently paying taxes on rooms that I don't use or need. For instance, I finished a bonus room over my garage and fifth bedroom in my attic with heat and sheetrock. Can I "unconvert" these unnecessary rooms to lower my property taxes? ? Debra L.
Yes, you can ? but it may not make sense to do so. As Newton Buckner, partner at Hartford, Conn.-based accounting firm Whittlesey & Hadley, points out, the only way to cut your property taxes is by devaluing your property. And if you plan on selling your house at some point, that may not be such a smart move.
Weigh the costs against the benefits of what you're proposing. A local real estate broker could tell you how the value of your home would change if you turned it into a four-bedroom house with an unfinished space above the garage. And your town assessor can confirm what impact that drop in value would have on your annual property taxes. But don't forget to factor in the costs of the "unconversion." Buckner notes that you'll probably need to apply for permits, along with paying for any necessary plumbing, electrical and heating work to stay in compliance with municipal building code.
In the end, you may discover that you've reduced the value of your home by $50,000 dollars, which could save you around $1,690 in taxes, given your town's property tax rate. If you were planning on staying in your house for the next 15 to 20 years, those savings might well offset the cost of labor and the loss of value to your home. But if you think you might want to sell your house before then, you're probably better off leaving the unused space as is.
? Marc Mewshaw
Got a question for the Help Desk? Send it to?helpdesk@cnnmoney.com.
Source: http://helpdesk.blogs.money.cnn.com/2012/12/28/reduceusable-spaceto-cut-my-property-taxes/
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