Can My In-Ground Pool Add to My Property Taxes?

In-ground pools require excavation and soil retention. They are permanent structures. Unlike an above-ground pool, which can be packed up and moved to another place, removal of an in-ground pool would require digging it out and refilling and landscaping the area. So the in-ground pool qualifies as an improvement to your real property, and that -- in turn -- can translate into higher property taxes.

Real property value, determined by real estate professionals, depends on its “comps” -- similar properties sold in the same area around the same time. Where the outdoor pool season is short, the value of a pool -- above ground or in the ground -- would be less than it might be in a warmer area with a longer swimming season. Value is also in the eye of the buyer. Pools may detract from value for couples with young children for safety reasons, and maintenance issues may put off older couples. The tax value of your pool is determined by the municipal assessor, who bases the evaluation on the actual market value.

Property tax practices vary from state to state and among municipalities within each state. It’s a safe bet, however, that in most jurisdictions your property will be reassessed when you make improvements, and an in-ground pool by definition qualifies as an improvement. Assessors compute property value at a percentage of market value using -- you guessed it -- real estate comps. Depending on your market, an in-ground pool may add as little as 5 percent to as much as 30 percent of its purchase and installation cost to your property’s value. So if you have a $100,000 house and spend $30,000 on a pool, the value of your house may rise by $1,500 to $9,000.

The assessor turns in a uniform fraction of the market value, say, 50 percent of market value as your assessed valuation. If your tax rate is $3.10 per $1,000 in assessed valuation, the bill for your house with a pool -- extending the example in the previous section -- would range between approximately $316.20 and $337.90, while your bill without a pool would be $310. Check for local and state exemptions and deferments for improvements, but whether your pool is worth some additional property tax -- now or down the road -- is up to you.