Author Topic: Tax on small "shed"  (Read 1699 times)

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Offline redbird

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Tax on small "shed"
« on: November 15, 2011, 01:17:03 PM »
Hi all,

We are trying to figure out how much tax is going to increase on the land by building a shed 10x14 or 12x18.  Does anyone have experience in this area.  I realize its different everywhere but I'm just curious if anyone thought to themselves, wow why did I just do that?  The reason I say that is we are still renting while paying on land and added costs will take us longer to build the "main" house.

Any suggestions?  ???
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Offline Redoverfarm

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Re: Tax on small "shed"
« Reply #1 on: November 15, 2011, 01:52:55 PM »
Unless you are in a high tax area I doubt that a "shed" of that size would be very noticable in comparison to the land.

Offline muldoon

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Re: Tax on small "shed"
« Reply #2 on: November 15, 2011, 01:54:44 PM »
Like you said it is different everywhere, but I doubt it would be much of a difference to be honest.  What the tax folks really care about is potential for commerce or asset value, and your shed is just not going to rack up any taxable value. 

One thing I do think is relevant is that if you ask your permitting folks what is the smallest size shed you could build sans a permit and built to those dimensions, they would never know about it.  I have seen quite a few posts saying many counties do not require anything for buildings under 200 square foot, which 10x14 or even as big as 12x16 would fall under.  If they don't ask and you don't tell I don't see how they could tax you on it. 

Offline redbird

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Re: Tax on small "shed"
« Reply #3 on: November 16, 2011, 06:16:46 AM »
Thanks!  We really did want to skirt the permit law but its under 120sq feet.  And we kind of feel like whats the point at that small of a thing, it would be fun but it would be a toilet :)  And toilets are fun, but I guess we want a bit more :)  Thanks for the advice!

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Offline rick91351

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Re: Tax on small "shed"
« Reply #4 on: November 16, 2011, 07:20:11 AM »
The ranch has four different parcels.  Two parcel we use the most are seven acres and 158 acres.  We just got our tax notices after the tax assessors appraiser made a trip through the area.  We have done a huge amount of work up there in the last five years.  So things really changed and I knew they would, and I expect them to.  I opened it up and found we now pay almost triple for the for the seven acres over the 158 acres.  Those two parcels both fall under grazing, and some tillage however no high value row crop or cash crop ground like down in the valley.  We are still very reasonable on taxes up there.   

So just for giggles and curiosity I called the assessors office.  I talked to three different people.  I asked why taxes on seven acres is more than 158 when you could put them all in a sack and shake them out and they would all look the same.  Only one is larger than the other.  Top that off the 158 acres has our new 50 X 26 shop, it has the RV pads and septic tank.  Stuff they pointed out to me, the shop only raised it a few dollars.   The seven acres has a well and the power meter, picnic area and our large orchard, a tool shed that all so has the pressure tank and shed over the irrigation tank.  The 158 acres does not have a well nor a power meter. 

To them it all boiled down to not buildings, roads and improvements  but power and well.  That is where the value was set at.     
Proverbs 24:3-5 Through wisdom is an house builded; an by understanding it is established.  4 And by knowledge shall the chambers be filled with all precious and pleasant riches.  5 A wise man is strong; yea, a man of knowledge increaseth strength.

Online metolent

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Re: Tax on small "shed"
« Reply #5 on: November 16, 2011, 07:56:32 AM »
I built a 12x16 as a shed/guest house, ensuring we were below the 200 sq ft, no-permit-required rule.  Had the county stop by one day to see what was going on.  He asked how many square feet, I answered less than 200, he nodded and went on his way knowing that I knew what the permit rule was.  Later in the year, the assessor came by and wanted to measure it.  Although I made it clear that it was a less than 200 sq ft shed, he didn't care.   Our next tax bill added a line item of ~$5k for "the shed."  So, it wasn't significant, but the county is getting that little bit extra now.... 

Offline redbird

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Re: Tax on small "shed"
« Reply #6 on: November 16, 2011, 12:40:43 PM »
Oh man this is really great information. 

Rick- This is good to know.  We have rural water set up, but no meter yet, sounds like we'd be better off holding off on the meter and building the shed!  That's really good to know.  I would have thought the opposite.

Metolent- That's also good to know, $5k isn't a huge improvement and doesn't make much difference in taxes. 

Sounds like we'll just go for it.  I have a call into the county appraisers office.  Since we will have to get a permit, we won't be getting away with anything  ;)  Too bad though, we really thought we might be able to get away with building some stuff without the man involved.  Owning land is a truly liberating thing, except when you have to apply for permits to do stuff on it.  Sheesh :)  Ah well.  I am thankful!
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Offline Redoverfarm

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Re: Tax on small "shed"
« Reply #7 on: November 16, 2011, 12:59:39 PM »
Unless you are in a high tax area I doubt that a "shed" of that size would be very noticable in comparison to the land.

I had just under 7acs (land only)in the northern part of the state ( Near DC & Balt) and paid twice the taxes I did here with house, barn, sheds and 57 acs.  So a lot has to do with the area rather than the buildings and improvements.  I would price out a comparable pre-fab building and have the amount documented so if / when the assessor drops by and tries to put an outrages price you can show him the figures.   

Offline BassLakeBucki

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Re: Tax on small "shed"
« Reply #8 on: November 17, 2011, 08:16:21 AM »
Here is my experience with property taxes.
When preparing to buy a one acre plot that adjoins our current lake front property, I checked the county records to see what the taxes were for the previous owner and found them very reasonable. This supported my interest in buying the property. After we purchased the property, my next year’s property tax turned out to be four hundred percent more that than the previous owners, I was peeved. I wrote a letter to the township appealing my property tax with such a huge increase. They denied my appeal stating that when the property was sold, it unlocked the property valuation and the new tax was based on a new market value, basically my purchase price. The previous owner had owned the land for a very long time and its tax value had not changed much from their original purchase price, thus the much lower property tax.

I guess my point is, if you build something that will gain attention from the local government, they may re-evaluate the entire value of the property, not just the increased value with the shed. Each area will be different. I have also noticed more frequent attention from the appraisers in general than in the past. Guess they were leaving too much money on the table. ;)

Offline CjAl

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Re: Tax on small "shed"
« Reply #9 on: November 17, 2011, 09:36:14 AM »
i dont feel so.alone now. the previous owners of my property paid $200/year. my fist tax bill was $1200  ???

Offline Squirl

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Re: Tax on small "shed"
« Reply #10 on: November 17, 2011, 12:18:43 PM »
At least is was based on what you paid, which is a fair market value.  They re-assessed mine for 50% more than what I paid, 3 months after I bought it.  I think the taxes only went up $50 though, it wasn't worth the fight.

Offline Alan Gage

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Re: Tax on small "shed"
« Reply #11 on: November 17, 2011, 01:33:29 PM »
Quote
After we purchased the property, my next year’s property tax turned out to be four hundred percent more that than the previous owners, I was peeved. I wrote a letter to the township appealing my property tax with such a huge increase. They denied my appeal stating that when the property was sold, it unlocked the property valuation and the new tax was based on a new market value, basically my purchase price.

That's how it works around here and it's very frustrating, unless of course you're the one who's owned the land for a long time with no increase. The only fair way is to tax everyone for the market value of their house/property. A $100,000 house should be taxed at that rate whether I just bought it or have lived there for 40 years.

My sister pays 3 times the tax on her small acreage with a house and run down barn that she probably couldn't sell for $75,000 than her neighbors pay for 80 acres of some of the best farm land in the country that's worth about $750,000. But it's been in the family for a couple generations and she just bought hers 5 years ago.

They have started raising everyone's rates the past few years but there are still huge disparities between what's just been bought/built and what's been owned for a long time.

Alan

Offline Don_P

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Re: Tax on small "shed"
« Reply #12 on: November 17, 2011, 06:53:12 PM »
We are reasessed every 3-5 years. I remember when we bought I ticked off one of the neighbors because I had given $500/acre for land that any damn fool knew wasn't worth more than $350. I had kicked up his fair market value. Well, my new neighbor just paid $4,000/ acre right before the bottom fell out. My taxes aren't bad compared to most folks but any damn fool knows this land isn't worth a dime more than $500  :D.

Offline redbird

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Re: Tax on small "shed"
« Reply #13 on: November 18, 2011, 06:11:26 AM »
So this brings up the question, do any of you hay or put cattle on your land to pay for the tax.  I hear a lot of farmers talk about not losing any money on the land by making the tax pay for itself.  I tend to not want cattle on our land as its already been overgrazed over the years and needs time to heal.  Its pretty rocky, but some haying could be possible.  Neither idea are we very excited about.  Anyone else have some ideas about paying for the tax with some land use.  I was sort of thinking that if we hooked into the grid and had a wind turbine we would get kickbacks in that respect.  Any ideas?

Thanks for all of the feedback by the way.   ;D
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Offline Squirl

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Re: Tax on small "shed"
« Reply #14 on: November 18, 2011, 07:39:30 AM »
I don't but I know some people that do.  A note of caution, this can be a zoning issue.  Getting land zoned agricultural for grazing drops taxes to almost nothing in some jurisdictions.  This can be a problem to rezone to residential for building later.  Also using residential zoned land for agricultural purposes may give you a headache too.  Check your states right to farm laws.

Offline Minicup28

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Re: Tax on small "shed"
« Reply #15 on: November 18, 2011, 07:50:54 AM »
We are in Schoharie county,NY. I took out a permit for $4500 for our shed you see in the avatar and it is assessed at $2500. It's 336 ft2 and is one of the site built sheds out of PA.
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Offline redbird

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Re: Tax on small "shed"
« Reply #16 on: November 18, 2011, 01:42:46 PM »
Oh right zoning!  MAN!  I think it is zoned agricultural right now.  That opened up a whole other can of works  d*  Thanks for the tip!

Part of me is excited to be on the path to becoming an expert in land use and all the fun that goes with it.  But part of me really just wants to start hitting my own head (now I know why this icon is here for us to use)  d* 
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Offline muldoon

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Re: Tax on small "shed"
« Reply #17 on: November 18, 2011, 02:35:56 PM »
redbird, regarding cows and hay; where are you located?  You should consider adding that to your profile so it shows by your username - even if it is just the state your in. 

Down here in central and west Texas we have been very hard hit by drought for over a year now.  Coastal hay that used to go for 45 a bale now goes for 160.  I see 18 wheelers of hay on the freeway and hear they are trucking it in as far away as Georgia because the prices are so good. 

I started maintaining and developing pastures in 2008 or so and worked coastal in to help with soil erosion and to "help" choke out the mesquite.  I have some grazing agreements with neighbors for their cows to come on my place from time to time(a week or two so a month basically).  That ag use helps alot with taxes.  90% reduction in my case. 

So that's two ideas - hay for sale, or neighbors animals grazing when "you needed to mow anyway"