Some property owners on Long Island are receiving amnesty on building permits and fees. Why is this generous pardon being offered? What impact will changes or improvements to your property have on your taxes?
Even The World’s Richest Man Has To Get Building Permits
Elon Musk recently made the headlines again. After failing to make the rent on their San Francisco HQ, Twitter is now in trouble for not having permits for turning their offices into a ‘hotel’. The legal issue centers on them turning offices into bedrooms for staff to sleep on site.
There may be a lot of things you can get away with in life, but paying taxes and building permits are two that will always catch up with you.
Building Permit Amnesty
One town on Long Island has announced it is providing amnesty for those that failed to get building permits on work already done. Meaning those that file for permits and pay the appropriate processing fees now, can be forgiven for past due fines and penalties for work on commercial and residential property that they didn’t obtain permits for.
For many, this may not only apply to work they’ve done themselves, but even changes a previous owner made before buying it. Those violations will always remain attached to the property, and become the debt and responsibility of the new owner.
Of course, we shouldn’t confuse this with pure generosity.
Getting property owners to turn themselves in saves the building department and tax authorities a lot of leg work finding these issues themselves. It may also super charge them with additional revenues they missed out on from work that was done without paying regular permit application and inspection fees.
Even more significantly, it means that many of these properties may now be subject to high tax assessment values, and annual property tax bills.
You should always get permits. This may be an opportunity to save money on expensive fines. Though, don’t think it is a free handout.
Calculating The Cost And Returns On Property Improvements
Before doing any further improvements, carefully assess why you are really doing them, what the true cost is, and their value.
Many property owners mistakenly believe that their home improvements are going to add a lot of value, and help them resell for more. Like on those ‘reality’ TV shows. This is rarely the case. In fact, most improvement and renovation projects are net losers. Meaning you may only add 50 cents in value for every dollar you put in.
Then, where you are tangibly increasing property value, such as when adding square footage, you are also increasing your property tax bill. Be sure to factor that cost in for every year going forward. As well as how it may make your property less attractive to future buyers.
Consider what you really want. Are there simple aesthetic improvements you can do that will increase your enjoyment of your space, without raising your property taxes?