When it comes to reporting a newly built home’s square footage to tax entities, builders don’t always get it right. Here’s how that can cause you to overpay on your taxes.
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When you build a brand-new house, the builder will take your floor plan and report its square footage to tax entities. The problem is that they don’t always get it right, and that’s why you need to double-check what’s been reported.
I’ve run into this problem a couple of times. Once, a client was surprised to see that their investment property’s square footage had been reported to be too high. I took a second look, and it turned out the report sent to the taxing entity stated the property had 2,806 square feet when it actually only had 1,806 square feet. That was causing the client to overpay on their taxes, so we needed the correct information to be reported.
Double-check with your builder and your tax entity to make sure that you’re not overpaying on your property taxes.
Another time, I was with a client who was making an offer on a property. As we walked through the house, I knew something didn’t feel right. The MLS listing said the house had 2,750 square feet, but when I found the floor plan for the house on the builder’s website, I found out it actually had 2,500 square feet. There was an option for a 250-square-foot game room, and it seems like that room was reported to the taxing entity even though the home didn’t have that room.
The bottom line is to double-check with your builder and your tax entity to make sure that you’re not overpaying on your property taxes due to an error with how your property was reported. Why pay more taxes than necessary?
If you have any questions about real estate or need anything else, reach out to me. I’d love the opportunity to help you out.