Are Sheds Taxable? How Sheds Can Affect Property Taxes

July 3, 2019

Sheds are becoming more and more popular these days. Aside from their use as extra storage, sheds can be used for a variety of different purposes: as crafting corners, personal nooks, and even home offices.

For homeowners that need extra storage or extra space, investing in a shed is becoming an increasingly viable option: especially with rent-to-own shed options available. Instead of renting out a storage space miles away, putting monthly payments towards your own shed means having easier access to your stuff and the freedom to customize this outbuilding to your specific needs.

But many people wonder, how does adding a shed affect the home financially? Are sheds taxable?

If you’re thinking of eventually selling your home, you’re probably interested to know how adding a new structure will increase your home’s selling price. On the other hand, if you’re planning on sticking around for awhile after adding a shed, you’ll want to know if adding the new structure will also raise your taxes.

How Does Adding a Shed Affect Home Value?

Before diving too deep into any other related topics, it’s important to understand the cost of a shed.

On average, it costs $3,000 to build one, but that depends on the type of shed you’re building and if you’re contracting out the work or building it yourself. Generally, the most affordable option is to buy a prefabricated shed, which can be delivered as a finished shed or assembled on site when delivered to your house.

That being said, a shed does add value to your home — but perhaps not in the way you think.

If you’re thinking of selling your home, expert appraisers from different parts of the country have said that adding a shed does not increase home value, at least not in the way it costs to build or buy one. Some may even consider it a liability. Overall, the appraisal of a shed depends on the home, the appraiser, and what it is needed for.

The good news for homeowners looking to add a shed to their home is that the structure increases marketability around selling while having little effect on property taxes.

An Introduction to Property Taxes

Property taxes are a pain for every homeowner.

Everyone has to pay them, even after the mortgage is all paid up — and almost everyone would agree that they’re paying too much. But as much as you don’t want to have to pay property taxes, they are essential to your local community. They are used to fund local projects and services such as law enforcement, education, and recreation.

Property taxes are ad valorem, which means they are assessed according to property value. They depend on two things: the tax rate and the current property value. Tax rates and tax laws differ depending on where you live.

So… Are Sheds Taxable?

An important factor in judging whether a shed is taxable or not is the presence of a concrete floor. In some states, an outdoor structure can only be considered taxable when attached ‘permanently’ to a property. To be considered ‘permanent’, the property must have a foundation to water, electricity, and sewage — all markers of a ‘liveable space’.

Because of this, most sheds built by Countryside Barns are not taxable, since they are built on skids, making them portable buildings. However, to be safe, we recommend that you consult your local zoning office to see how sheds are handled in your area.

It may also be helpful to consult a local tax assessor. They’ll be able to answer your questions on how your amenities and extensions may affect your property tax.

Maximizing the Value of Your Shed

Even if your shed doesn’t add much to your property price, there are some things you can do to use your shed to add to the overall value and marketability of your property when it comes time to sell.

Get a Building Permit

Building permits are important for protecting yourself from retribution, especially if you live in an area that requires one. If you build a structure without proper permits, the city may charge a fine. In fact, some may even demand you tear down your structure if it was built without a permit.

Permits are necessary because prior to the approval of the permit, the city will assess the project site and inspect the work done on it. There may be instances where they’re not required, but the best thing to do is to check your city’s policies.

When it comes to new construction in or around your home, it’s better to be safe than sorry!

Keep your Shed in Good Shape

Although sheds don’t add much value to your house, a poorly maintained shed may discourage a buyer from proceeding with the purchase. With poor presentation, buyers will also assume that the shed is something they will have to deal with (in terms of making fixes and ongoing maintenance), and as a result, could ask for a lower sale price.

Aside from that, a dilapidated property can also deter the potential buyer from getting their home loan approved. Prevent that by carefully choosing the right materials from which to build your shed. At Countryside Barns, we offer sheds made of many different materials: metal, vinyl, or urethane — for whatever your requirements may be.

Match the Shed to the Style of Your Home

Ensure that the shed has a similar look or feel to the rest of your property. With the Countryside Barns Shed Designer Tool, you can customize your new shed from the comfort of your home. Then, all you have to do is wait for your shed to be delivered.

Don’t forget to properly stage your shed during home showings, to appeal to buyers.

Final Thoughts: Are Sheds Taxable? How Sheds Can Affect Property Taxes

Sheds are becoming a popular addition to homes. Previously used almost exclusively for extra storage space, today’s sheds have multipurpose uses. They may not add substantial value to your home financially, but that also means they do not affect property taxes (at least in most instances). Despite that, well-constructed sheds may contribute to overall marketability, should you think of selling your home.

All in all, it all, answering the question, “Are sheds taxable?” depends on the laws in your area, so don’t forget to consult with your local zoning authority. Then, when you’re ready to move forward, consider the options at Countryside Barns.

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