While home improvements can help improve the overall resale value of your home, they can also cause a backlash and incur higher property taxes on your home. These will occur when you enhance your home better then necessary, doing more then just improving the quality of the home and its lifespan without needing serious remodeling.
If most of the other homes on your street are only one story and you add a second story to your home, basically doubling its overall square footage, this may be seen as an over-improvement of the house and encourage a reassessment of your property's worth, in turn raising your property taxes. Running this home addition by a property tax assessor before you make your home improvement is probably a good idea, so you can budget for the possible increase in your yearly taxes.
Sport courts or tennis courts, which are additions that most homes don't have, would qualify as a home improvement which would raise property taxes. These structures are expensive to build and help the property value, in turn incurring more property tax. With the exception of a pool, building other structures on parts of your property outside the house structure will often raise your property taxes, and sport courts fall into this category. One option may be to build a sports court that can be easily disassembled when you sell your home.
A guesthouse can be considered a second house on your property, which would raise your property taxes significantly. This affects the size the guest house, as certain states may have rules which detail structures that are beyond a certain size being considered separate residences which must pay more property tax then just another structure on the property. Check with your local municipality as to what the property tax increases may be when building a guesthouse.
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