On Aug 14, 6:54 am, se...@panix.com (Seth) wrote:
> There's land with a single-family house on it. If the house were torn
> down and an apartment building constructed (total cost $3 million),
> the apartment building would be worth $4 million. I believe that
> indicates the property should be assessed at $1 million, not $4
Maybe, but not necessarily. The _land_ is almost always being taxed at its highest, "best" use. If it is zoned for multi-family apartments, that is the rate per sq. foot/acre the owner will be paying. The improvements (buildings) OTOH are more typically going to be incremental to the value of the raw land rather than a large multiple of that value as in Seth's example. Different states use various formulas, but yes, I would expect the tax rate to go up when the owner actually does build an apartment building on the lot instead of a single family house. Still, the tax rate is not likely to go down when he tears down the house in the first place, creating a vacant lot.
Of course, as usual YMMV and state laws differ. Check with a local lawyer before you tear your house down to save a few bucks.
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Mike Jacobs
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