Now that you’ve gotten your new home, you’re probably excited because you’ll be able to make multiple modifications of all kinds, such as a new deck, a living room, or a pool.
But before you make any changes to your home, you need to differentiate which acquisitions would stick to the home’s value and which would not. For example, an in-ground pool would increase the home’s market value, while an inflatable pool would not.
What modifications change the value of your home?
Any permanent implementation to your home that changes your home’s infrastructure will either improve or worsen the price of the home in the real estate market.
Installing a terrace on the second floor of your home or simply adding a new floor to your home will drastically increase the cost of your home monetarily.
In turn, if you remodel the kitchen for a larger one or add a new bedroom, you will support the cost of it. It could also be an inground pool; it will influence how much your home is valued.
Are there any consequences besides the change in value?
The answer is yes because every property needs to be part of your taxes, and the higher the cost, the more you pay to the state. So depending on what you add to your home, your taxes may skyrocket.
But the effect of the value will also depend on what type of structure you add to your property; for example, facilities that are added outdoors to your infrastructure will increase the costs more.
A simple example would be in-ground pools, which can increase the value of your home from $50000 to $80000 depending on the area it occupies, the type of pool, and how much depth or water it needs to fill.
How do swimming pools affect your tax increase?
Many factors influence the increase in taxes when you install an inground pool on your home property. Normally, your home’s facilities are assessed each year.
But the main factor that influences the cost of the tax is the property appraiser’s estimate and all the tax parameters that vary from state to state.
For example, US News & World Report has calculated that, in most states, an inground pool installation can increase the value and tax burden by 6% to 7%.
In addition, increasing the cost or monetary value of the home also influences the sales tax. If your house used to be worth $100,000 and now with a pool, it is worth $150,000; you will earn $50,000 when you sell it.
Therefore, you will have to report your taxes as a regular income of $50,000; and you will have to pay taxes for it. But it does not mean that it is impossible to sell it, as, since you have paid them, you will make a good profit.
Does it affect the property insurance costs?
Because the house’s value has increased due to the installation of a permanent asset, you will have to increase the cover of your insurance if it is an inground pool.
If for some reason, a person suffers an accident while bathing or playing in your pool, the state will hold you responsible for the damage, and you will need to pay for any expenses incurred by the injured party. However, the best advice given by insurance companies is to leave pools in enclosed areas to avoid any accidents.