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Let’s admit it- a well-manicured lawn is every homeowner’s dream!
But the hassle of building and maintaining a lawn doesn’t end with the finished look. As part of landscaping, your lawn projects can have a significant impact on the property tax. That’s why you wouldn’t want to start off with one just at this moment.
So that you have a clear understanding of how landscaping affects property tax, we’ve curated a detailed guide. Additionally, we’ve listed down some key steps that will help you get the most from those remodeling projects.
Without any further delay, let’s dive into the deets!
Does Landscaping Increase Property Tax?
- Does Landscaping Increase Property Tax?
- What’s The Tax Assessment Process?
- The Tax Assessor Identifies Improvements
- How To Challenge The Property Tax?
- What Else Can Increase The Property Tax?
If we had to answer in one word, we’d say yes. Like any other home improvement project, a landscaping job improves the value of your property. And since property tax is ultimately calculated on the total value, the tax bill will also see a rise, even if the tax rate remains the same.
But before the statement above scares you off, picture this: depending on your property’s original value and the landscaping project you opt for, the value of your residence can go up by anywhere between 5.5% and 12.7%.
While patio landscaping can increase the total price by 12.4%, smaller projects like landscape curbing and hedging can take up the cost by 4.4 and 3.6%, respectively. So, if the original value of your home is $300,000, you can expect a hike between $16,500 and $38,100 on the resale price. Now that’s a worthy deal!
Apart from that, a well-planned landscape forms a positive first impression in the buyer’s mind-it’s an indicator of how well the home has been cared for. Hence, the process becomes much more meticulous than planting just a few shrubs, or trees in the backyard.
In the following sections, we walk you through the key factors to keep in mind before undertaking a landscaping project.
Planning In Advance
A common mistake that homeowners make is to go for disorganized landscaping, meaning they don’t have a coherent plan. They may first plant a tree, and a few years later, add some flower beds, shrubs or put in another tree. The resultant disorganized landscape doesn’t add much value to the property, even if you have planted the most expensive greens.
In this regard, we’d advise hiring a professional landscape designer. But if you don’t have the budget or want to go the DIY way, sketch a master plan and stick to it during the process. In fact, it’s quite possible to get a professionally curated landscape with a modest budget between $500 and $3,000.
That said, a thumb rule of landscaping states that homeowners should spend a minimum of 10% of the property’s current value on landscaping projects. For instance, if your home is worth $400,000 during the time of landscaping, set aside $40,000 for these projects. However, you need not spend it at once.
Other aspects like a deck or shed add value to your home, depending on the rules of the area you live in. For example, some cities don’t consider adding a deck or screened-in porch to increase the value of the property.
Other places like Chicago may consider it as value-addition only if the deck has a concrete floor. In case of the latter, try going for a larger deck to add square feet and consequently, more value.
Furthermore, the ROI (return on investment) varies between project to project. However, real estate experts state that smart landscaping decisions can yield an ROI anywhere between 200 and 400%, though it may be difficult to give an exact number. But given the lucrative prospect, having an accurate plan becomes all the more important.
Having Healthy Plants
A second important factor that appeals significantly to potential buyers is the maturity of plants. Unsurprisingly, a garden full of mature and full-sized plants speaks of care like nothing else. So, even if you don’t feel like catering to a wide diversity of plants, make sure the existing ones have healthy growth.
On this note, it’s worth mentioning that flowers and vegetables can also increase the property tax through a process known as ‘alteration of land improvement’.
Deciding On The Time Frame
There’s nothing better than a long-term landscaping plan, as it gives you ample time to design and maintain the landscape. But the situation may demand you to get on it with little time to spare. If you plan to sell the house within a year, there are several immediate steps that will help you dress the landscape quickly to enhance the overall value.
You may begin by trimming the plant beds to get fresh edges. Beyond that, a well-defined boundary between the grass and mulch or dirt renders a professional look. And don’t forget to treat the lawn with fertilizers so that you have a luscious and consistent green carpet throughout.
As an additional step, you may also intersperse with colorful annuals to break the monotony of green. Likewise, large perennials and shrubs make the lawn look like it has been worked on for months, even if you have just started working recently!
Choose The Right Season
Considering that you start with landscaping under normal circumstances, the best time to plant shrubs, trees and perennials is between the spring months of April and May. This will give your plants enough time to grow to its full size during summer and fall. But if you miss planting in spring, the next best season is fall.
What’s The Tax Assessment Process?
Now that you have a fair idea about the nitty-gritty of landscaping, It’s time for us to look into the tax assessment process.
The Tax Assessor Identifies Improvements
County tax assessors or county appraisers keep track of the value of all real estates that fall within their taxing zone, like a city or county. Besides, they also maintain a database of local property through advanced mapping software.
Depending on the budget and size of the area, multiple methods are used to detect changes in property. Some of the common methods are listed below.
Tax assessors often drive around the city or county observing changes in landscaping. They generally stay outdoors unless the homeowner invites them in.
However, this door-to-door approach may not be suitable for a bigger area like Maricopa County in Arizona. In that case, assessors may resort to aerial photography to notice any enclosed patio, porch, or a newly added room in the backyard, especially those without a permit.
Tax offices regularly check on the building permits to monitor changes in property. However, whether or not the project needs a permit depends on the scale and cost. Usually, homeowners spending $5,000 or more on remodeling are required to achieve a license, but that can vary from one region to another.
Neighbors may often tip off authorities about an unpermitted project due to personal grievances or any disturbance caused during the work.
Comparing Sale Prices
It may so happen that a landscape improvement isn’t visible from the street and hence, may not go unnoticed during an outdoor inspection. But that doesn’t mean it won’t creep into your tax bill.
This is because assessors also take note of the sale price when you sell your property to determine the tax value of similar homes nearby. As those houses get upgraded and sold for more with time, the market value and property tax of your home also increase. Long story short, the changing market value of the neighborhood helps assess your property tax at a given time.
How To Challenge The Property Tax?
If you disagree with the tax evaluation, you can challenge the assessed market value of your property. For this, you will need to prove that the appraised value doesn’t reflect the proper valuation of your property.
The first step in this process is gathering comparable listings. Alternatively, you can ask your tax assessor to provide you with records of comparable sales. Besides, tax records are available online and can be downloaded with assistance from the local tax assessor.
Next, check with the local tax office to understand the know-how of raising a dispute. Your aim should be to justify that homes with similar tax values as yours are better, meaning your tax bill is considerably high. If your problem remains unsolved, there might be a provision for you to pursue the case with an independent tax appeals board.
Another thing to keep in mind while challenging the tax bill is to do it through appeals. Not only will an appeal make for a better case, but it will also impress potential buyers as they will have a low property tax to pay initially.
Similarly, ‘down talking’ about your home may not sound suitable, but it’s a practical idea nonetheless. After all, why would you pay more for a leaking roof or faulty drainage? You will have to disclose the flaws to the buyers anyway, so better save money on them while you can.
Moreover, maintaining a cordial relation with your tax assessor will also come in handy in times of disputes. If you have to make an appeal, your local tax assessor will be better off remembering you in a good way.
What Else Can Increase The Property Tax?
Apart from landscaping, there are a number of other factors that can cause the property bill to rise. Some of them are:
State Or Local Budget Cuts
State or local authorities use a part of the revenue collected from the property tax in funding the public school system, libraries, and other essential services. However, they may also reduce their funding from time to time. And it may lead to increased property taxes as the money has to come from somewhere.
To avoid this to the best possible extent, citizens can vote for officials who promise a steady budget for such services. Other than that, there is very little under public control.
Increased Public Employee Benefits
On average, government employees receive benefits that are 45% higher than that of their private-sector counterparts. So, when wages, pensions, health benefits for the former are on the rise in times of recession, homeowners may have to make up for the cost through inflated property taxes.
The location of your property forms a crucial component of your home’s value and tax. For instance, if your home is located beside a pretty lake, both its value and tax will be more. On the other hand, the construction of a highway or chemical plant can dent the resale value.
Renovating the kitchen, adding a bathroom, or converting the garage into a living space can affect the property bill. Again, the extent of raise will depend on the project type and the rules of that specific region. But don’t try to sneak in any remodeling project without getting proper permits as non-licensed constructions can become a roadblock during resale.
Sure, most landscaping projects aren’t tax-free, but their value addition properties make them an enticing proposition. If you have been thinking about it, now is the time to get the job done.
And if you’re already blessed with a lawn, ensure that it’s properly taken care of. Plus, you’d always want your landscaping investment to be worth it.
That has brought us to the end of today’s guide. But we are not leaving without a pro tip: some landscaping tasks like fencing will only add to the property value if they serve a real purpose. Hence, always check with the local or State rules before embarking on a project.
We hope we’ve been able to answer all your queries. Do let us know your thoughts in the comments section below.