So if you have an apartment or rental home and are intending to sell, look ahead and plan a way that will minimize the tax bite. If you’re buying a home with an apartment, added garage, or major remodeling job, you’ll want to verify that building permits show the house is zoning compliant.
You can get extended title insurance coverage that insures that previous owners have complied with all zoning and building permits. In one interesting case, homebuyers Brandon and Julie made an offer on a home with a basement apartment in a great neighborhood near a university.
The basement apartment had been rented out for years, and several other homes on the street also had basement apartments. When the appraiser checked the zoning and found out that the basement apartment was illegal, she adjusted her appraisal down to the market value of a single-family home.
Although the city’s zoning department head said he hadn’t and wouldn’t enforce the zoning in this case, the department wouldn’t approve the house for duplex zoning. This created a sticky situation. As a single-family home, the appraisal came back $23,000 under the asking price.
Related posts:
- The Tax Advantages of Owning Rental Property Part (5) The sellers were upset because now the genie was out...
- The Tax Advantages of Owning Rental Property The practice of renting out your extra space in the...
- The Tax Advantages of Owning Rental Property Part (2) Getting a special-use permit entails going to the zoning department...
- The Tax Advantages of Owning Rental Property Part (3) Uncle Sam allows homeowners to deduct the following costs of...
- The Tax Advantages of Working at Home Part (2) You may also be able to depreciate computers, business machines,...
