There’s nothing quite as relaxing as sitting with a cup of coffee in your sunroom and admiring your backyard’s beauty and tranquility. As much as you enjoy your sunroom, keep in mind that adding a sunroom will increase your property taxes.
TL;DR (Too Long; Didn't Read)
Adding a sunroom will almost certainly increase your property taxes, but it will also increase your enjoyment of your home.
Adding on to Your Home
Adding on to your residence, whether it’s a breakfast sunroom, porch or another bedroom, will almost certainly increase your property value, and that triggers a higher property tax bill. As a general rule, anything that adds value to the home will cause your property taxes to rise.
Improvements and Location
Much depends on the type of improvement and the location. Adding a sunroom will cause property taxes to go up almost anywhere, but certain improvements may cause a reassessment in one city and not in another, and it’s the reassessments that mean you’ll pay more in taxes. For example, MarketWatch notes that adding a bathroom in Los Angeles will probably result in a reassessment, but that’s not the case in Chicago, as long as the bathroom didn’t change the home’s square footage. MarketWatch does point out that in the Windy City, adding a screened-in porch is unlikely to add home value, but a four-season sunroom connected to your HVAC system will cause the assessed value to go up.
One way to find out how much your property taxes will rise due to a specific improvement is by contacting your local tax assessor’s office beforehand. You can probably get an idea of how much your property taxes will increase because of the addition to your home. For most people, the increase isn’t a deal breaker, but a high enough increase may cause some homeowners to reconsider the project and think about alternatives, such as moving to a larger home.
Deductible Property Taxes in 2018
The Tax Cuts and Jobs Act, signed into law by President Donald J. Trump on December 22, 2017, changed the amount of state and local taxes homeowners may deduct on their federal income tax returns. Until the TCJA expires in 2026, homeowners may only deduct up to $10,000 in state and local property taxes. If an improvement pushes your taxes beyond that point, that’s another reason for reconsideration of the project. The TCJA also raised the standard deduction to $12,000 per person, so that's $24,000 for a married couple filing jointly. Fewer people will itemize on their tax returns because of the large standard deduction increase.
Deductible Property Taxes in 2017
For taxes filed for the year 2017, all property taxes are deductible on your federal income tax form, as long as you itemize deductions. Because the standard deduction in 2017 is much lower than 2018, more people may itemize and thus take advantage of deductible property tax.
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including PocketSense, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.