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Do Sheds increase property taxes? It’s a good question.
Most of us have no idea how our property taxes are calculated. The local government sends us something in the mail with some obscure numbers on it and a final bill. If you’re like most people, you shrug and let your escrow company handle the rest.
However, knowing what goes into calculating your property taxes can help you with long-term planning when it comes to deciding what you want to do with your home.
For example, if you have an older shed that you don’t use much, you may want to get rid of it if you know that it’s adding to your bill every year.
If you don’t have a shed but are thinking of building one, then you’ll definitely want to know if it’s going to cost you more every year when taxes are due.
The truth is, sheds don’t affect property taxes, so it’s not too much of a concern.
Property taxes deal only with the livable structures on your property.
Why? Because, in general, sheds and other structures don’t sway the price of your home all that much. It’s a nice asset to have.
Here’s some helpful information on building a shed on your property and what you need to know about property taxes.
Table of Contents
The Property Taxes Basics
Death and taxes are the only two certainties in life, as the saying goes. When you buy a house, you can count on paying taxes every year that you own it.
And don’t count on them ever going down. They typically go up marginally most years.
The good news is that, generally, the value of your home will outpace the property taxes and, when it comes time to sell, you’ll make all that money back (and then pay taxes on the proceeds of the house).
How much you pay in taxes depends on the value of your home. If you’ve ever purchased a house, then you know that values fluctuate. The price for the same home will be different in the winter than in the summer.
Home prices depend on location, interest rates, age, amenities, and a host of other factors.
There’s very little science to how homes are valued. They can be investments or emotional purchases and everything in between.
Knowing how hard it is for real estate professionals to value homes, then you can guess what a challenge it is for government employees in charge of assessing values for tax purposes.
What many people don’t know is that you can dispute property taxes if you feel like the city, county, or state is valuing your home too high.
The process for disputing assessed tax values changes by location, so contact your local authorities to find out how to do it.
Sheds and Property Taxes
In most areas, something is taxable when it’s attached to the home permanently. Sheds are viewed as temporary structures, and most of the time they aren’t attached to houses.
They also don’t have sewage, power, and water. You may have one or two of these attributes, but it’s rare to have all three.
Are sheds considered a permanent structure? Sheds are usually portable and built on skids, so property taxes don’t apply.
Knowing you won’t get a higher tax bill can help you decide on whether or not you want to install a shed.
These days, companies are doing impressive things with backyard sheds. They can make them into home offices, workshops, storage units, and more.
Not having to pay more in taxes each year may make it easier to go for something bigger or nicer in your yard.
Modern Sheds & What You Need to Know
People still keep their bikes and shovels in the shed, but modern sheds offer so much more in the way of convenience and function. You can make them with more materials now, and install insulation in them for all-year use.
They can become a play area, a recreation staging area, or a game room for the kids.
A good shed can be a ton of fun to use while you own your home, and it’s a great selling point now for people who want to maximize space.
Sure, a wooden or vinyl shed in the back where you keep gardening tools isn’t a huge selling point, but if you have a big shed with a pool table and TV hookups, then it’s a whole different story.
However, building a serious shed takes work and some good planning. Here are some things you should do before you decide to go for it.
Check on permits – Do sheds need permits? Depending on where you live, you may need a permit to build a sizable shed in your backyard.
If you need a permit and fail to get one, you could face serious fines. Some places will even make you tear it down and rebuild once you have the permit.
Just check to see if you need a permit for whatever it is you’re building before you do it.
Focus on the design – You might not think too much about it now, but you should. The design of your shed should fit in with your home’s overall aesthetic. It’s going to matter when it comes time to sell.
People who don’t like the look and feel of your shed will add whatever it will cost to tear it down into what they want to pay. The wrong color or style could actually scare off buyers.
On the other hand, the right design can bring in better buyers.
Maintaining the Shed – A nice shed, like your home, will require maintenance to stay in good shape.
Don’t let it rot in the yard and become an eyesore. Keep the outside looking fresh and the inside clean to get the most out of your shed.
Sheds might not add a ton of value to your home, but they can be like the cherry on top for the right buyer. A well-made shed will be a bonus for people looking for something a little extra.