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When is a Remodel Considered New Construction: A Comprehensive Guide

When embarking on a remodeling project, it is crucial to understand when it crosses the line into new construction. This guide aims to provide clarity on this topic, outlining the conditions under which a remodel can be considered new construction. By understanding these distinctions, homeowners and contractors can navigate the process effectively and make informed decisions.

I. Definition: Remodel vs. New Construction

  • Clarifying the basic differences between a remodel and new construction.
  • Identifying key factors that determine whether a project falls under one category or the other.

II. Conditions for Considering a Remodel as New Construction:

  1. Scope of Work:
  • Expanding the existing structure significantly, such as adding new rooms or levels.
  • Altering the building's footprint or structural framework.
  • Substantial changes to the building's exterior or overall appearance.
  1. Structural Modifications:
  • Modifying load-bearing walls or foundations.
  • Changing the roofline, floorplan, or layout significantly.
  • Adding or removing major structural elements.
  1. System Upgrades:
  • Upgrading mechanical, electrical, plumbing, or HVAC systems throughout the entire building.
  • Installing new systems that require extensive modifications to existing infrastructure.
  1. Code Compliance:

Renovations transform living spaces, often with new fixtures, wall finishes, and floor coverings. Sometimes, a renovation also includes new appliances or energy-efficient windows. Remodeling describes an alteration to the very character of living spaces.

What is the definition of a new remodel?

Remodeling is defined as altering a structure, whether this alteration is exterior or interior, from the original construction. Some examples of remodeling are, but are not limited to: Completely transforming the structure and/or style of any space, home, or building.

What is the meaning of new construction?

New construction refers to structures that are brand new and have never been lived in. The allure of newly constructed homes is quite strong for some people. There are no worn-down parts in need of repair, and everything is shiny and pristine because no one has occupied the home previously.

What is the difference between renovation and remodel?

Definitions. Technically, a renovation and remodel are defined differently. While a remodel changes the form of something (like adding a new shower to an existing bathroom), a renovation focuses more on restoring something old into good repair (fixing up a creaky floor, for example).

What are the 5 stages of home renovation?

The new master bath and hall bath replaces the small rear bedroom.
  • Stage 1: Planning. You want to stay extremely organized when you begin a remodeling project or home addition.
  • Stage 2: Budgeting.
  • Stage 3: Demolition.
  • Stage 4: Construction.
  • Stage 5: Cleanup.

Who is responsible for determining the square footage of a piece of property?

Verifying square footage is generally the buyer's responsibility as part of the due diligence process, and winning the case would require proving fraudulent intent or other legal wrongdoing.

Does a finished attic count as square footage?

Spaces like garages, three-season porches and unfinished basements or attics are not included in the square footage of a house. But if a basement or attic has been “finished,” then the space may be included in the home's square footage if it also meets ceiling height requirements.

Frequently Asked Questions

How do I prove the square footage of my house?

It's by using local property records or tax assessments. The real estate agent you hire for the home-buying process can help you with the best way to verify the total square feet.

What is defined as new construction?

A New Construction property is a piece of real estate that has completely new improvement on the property. This would be different than a renovation or rehabilitated property that may have many new features. A new construction property can require a different purchase contract than a standard resale home.

What triggers a reassessment in California?

Completion of new construction or a change in ownership (“CIO”) triggers a reassessment to a new Base Year Value equal to the current fair market value, meaning higher property taxes.

What is considered a substantial remodel in California?

To be a “substantial remodel,” the landlord must plan to either replace or substantially modify a structural, electrical, plumbing or other system in the unit in a way that requires a permit, or to abate hazardous materials within the unit.

What type of construction is a remodel?

Remodeling is defined as altering a structure, whether this alteration is exterior or interior, from the original construction. Some examples of remodeling are, but are not limited to: Completely transforming the structure and/or style of any space, home, or building.

Does a remodel trigger a reassessment in California?

Remodeling work is not generally subject to reassessment unless new square footage or fixtures are added. It can include new carpeting, countertops, cabinets or windows.

What construction triggers a property reassessment in California?

Remodel: A remodel will cause a property tax increase when new square footage is added, or new improvements are built such as a spa/swimming pool. The complete remodel of a kitchen or bath with upgraded fixtures/appliances will also cause an increase in the assessed value.

What is considered new construction in California?

Most people typically consider “new construction" as building a new structure or adding on to an existing one. Under California property tax law, however, “new construction" can also mean renovating a structure to change its use; rehabilitating a structure to a “like new" condition; or even removing a structure.

FAQ

At what age do you stop paying property taxes in Florida?

65 or older

Certain property tax benefits are available to persons 65 or older in Florida. Eligibility for property tax exemptions depends on certain requirements. Information is available from the property appraiser's office in the county where the applicant owns a homestead or other property.

How do I avoid property tax reassessment in California?

So long as the individuals and the legal entity have the same proportional ownership interests, the real property will not be reassessed when transferred to or from the entity or the individual. A and B can transfer property owned by them 50/50 to an LLC owned by them 50/50 without reassessment.

How often are properties reassessed in California?

The county assessor must annually assess all taxable property in the county, except for state-assessed property, to the person, business, or legal entity owning, claiming, possessing, or controlling the property on January 1.

What's the difference between a remodel and a renovation?

Definitions. Technically, a renovation and remodel are defined differently. While a remodel changes the form of something (like adding a new shower to an existing bathroom), a renovation focuses more on restoring something old into good repair (fixing up a creaky floor, for example).

What is considered a home improvement in California?

“Home improvement” means the repairing, remodeling, altering, converting, or modernizing of, or adding to, residential property and shall include, but not be limited to, the construction, erection, replacement, or improvement of driveways, swimming pools, including spas and hot tubs, terraces, patios, awnings, storm

Is painting considered a renovation?

Renovating refers to improving, refreshing, or restoring an existing home with updated, more aesthetically appealing finishes. Installing new flooring, replacing kitchen faucets, and painting bedroom walls are all great renovation examples.

What constitutes new construction in California?

Understanding New Construction

Any substantial addition to land or improvements, including fixtures. Any physical alteration of any improvement, or a portion thereof, to a "like new" condition, or to extend its economic life, or to change the way in which the improvement, or portion thereof, is used.

When is a remodel considered new construction

How do I record documents in Riverside County?

You can eRecord your documents online through GetItRecorded.com right now in Riverside County. You don't have to leave the office, use the mail or stand in line. That saves you time and money. eRecording is faster, more efficient and convenient.

Can you fund and record same day in San Diego County?

- Orange County, Riverside County, San Bernandino. County, Ventura County, and San Diego County does. have same day recordings. -Los Angeles County there are no same day recordings.

How do I record a document in Palm Beach County?

You can electronically record documents online (eRecording) or you can bring your original documents to the Main Courthouse, South County Courthouse, North County Courthouse, West County Courthouse, Royal Palm Beach branch or mail your documents.

What triggers property tax reassessment in California construction?

Remodel: A remodel will cause a property tax increase when new square footage is added, or new improvements are built such as a spa/swimming pool. The complete remodel of a kitchen or bath with upgraded fixtures/appliances will also cause an increase in the assessed value.

What triggers a property tax reassessment in LA County?

Changes in Ownership and Notification to the Assessor

The statute of limitations under California Revenue and Taxation Code, provides that the Assessor must reassess as many as eight (8) prior assessment years due to failure to file the Change in Ownership Statement (COS form).

How do I get my property tax statement in LA county?

Annual property tax bills are mailed every year in October to the owner of record as of January 1 of that year. If you do not receive the original bill by November 1, contact the County Tax Collector or Assessor for a duplicate bill. Note, the original bill may still have the prior owner's name on it the first year.

What is the Proposition 58 in Los Angeles county?

California's Proposition 58 which grants the ability to avoid property value reassessment on inherited real estate, went in to effect on November 6, 1986. With certain limitations, California Proposition 58 allows for the exclusion for reassessment of property taxes on transfers between parents and children.

  • Is new construction taxable in California?
    • Contractors must collect the use tax from the customer and pay it to the State of California. When you are the consumer of materials and fabricate materials prior to installation, no tax is due on your labor charges; only the actual material cost is subject to tax.

  • How often does California reassess property value?
    • The county assessor must annually assess all taxable property in the county, except for state-assessed property, to the person, business, or legal entity owning, claiming, possessing, or controlling the property on January 1.

  • What triggers a reassessment in LA county?
    • All properties in Los Angeles County are required to be reassessed as of the date a Change in Ownership occurs. In some situations, exclusions from reassessment may apply, therefore avoiding an increase in your property taxes.

  • What is the statute of limitations for property tax reassessment in California?
    • The statute of limitations provides that the Assessor must reassess as many as eight (8) prior assessment years due to failure to file the Change in Ownership statement.

  • How is new construction assessed in California?
    • In determining the value of new construction, only the improvement being added is considered. If construction is in progress over any January 1 lien date, an estimate of value of the portion completed is added to the property's assessment.

  • How often are assessors required to make detailed property assessments in Utah?
    • Each year

      The assessor is required by Utah Law to list and value all property for "ad valorem" ("according to value") taxation on an assessment roll each year. The Lien Date or date of value is January 1.

  • How often are property taxes assessed in California?
    • The county assessor must annually assess all taxable property in the county, except for state-assessed property, to the person, business, or legal entity owning, claiming, possessing, or controlling the property on January 1.

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