Remodel & Renovate in 92835>Question Details

Furrycoral, Home Buyer in Orange County, CA

Converting a pool room and pool bathroom to interior space?

Asked by Furrycoral, Orange County, CA Sun Mar 10, 2013

We have a room next to the pool that used to be an outdoor kitchen area or pool entertainment room, with sliding doors. There is also a guest bathroom for the pool next to it. We could have the walls cut open to join this room and the bathroom to the interior space, and turn it into an interior bed and bath. I have two questions, 1. How might this affect property taxes? Since we owned the house for a long time we are enjoying low 1970s base value CA Prop. 13 tax rate and I am cautious about anything that could significantly increase our low rate, and 2. Would this kind of conversion increase the home value much, going from 3 bed, 3 bath ( 1 pool bath) ~3,000 sq ft to 4 bed, 4 interior bath ~3,250 sq ft?

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Tracy Williams’ answer
Did you check the OC tax accessor's website? I added around 370 sq ft to my home many years ago and it seems to me that my property taxes only went up about $200 for the year. If the website doesn't tell you, then you could probably call and get the information from them.

Let me know what you find out.
1 vote Thank Flag Link Thu Mar 14, 2013
In my humble opinion, which is probably worth less than 2 cents, the probable added assessment should only pertain to the former "air space" between buildings, that you'll be filling in, to make additional space not currently under the roof.

The assessor SHOULD be presently counting the pool house as living space, as it sounds like it has a roof, and 4 walls, like a guest house.

In 36+ years in this area, I haven't seen very many - if any at all - sun rooms considered living space, for assessment purposes. It probably depends on how substantial the structure is.
1 vote Thank Flag Link Sun Mar 10, 2013
As long as your remodel is TASTEFULLY and professionally done, and it has some cohesiveness with the rest of the house - AND you make sure to get all the proper permits - your project should enhance the value of your house by at least the amount you put into the remodel.

Such a project should not jeopardize your Prop 13 standing, although any added space ( That is now between the main house and your current pool room, for example.) might make for a slightly higher assessment from the tax man.
1 vote Thank Flag Link Sun Mar 10, 2013
Tracy, we would only perform such conversion with permits. But I still have no idea how much I should expect the property taxes to go up as a result. That increased tax amount, plus the cost of such remodel, would help us decide whether it's worthwhile or not. Let's suppose it costs us $10,000 for blueprints, installing doors in the walls, and furnishing the room etc. (just a wild guess). Would that total be listed on the permit and then the tax assessor automatically adds on 1 to 2% of $10,000 which is $100 to $200 per year higher in property taxes? When coming up with the value will the permit just include the cost of cutting open the wall, or do they get into the cost of installing floor tile and carpet etc.? I found many discussion forum posts about permits and following building codes, but the workings of the tax assesor system wrt remodels remains a complete mystery to me.
0 votes Thank Flag Link Thu Mar 14, 2013
Appraisers and lenders will not include any additional sq footage or value without permits. If you are going through the time, trouble and expense to do improvements, please do it the right way and get your permits as Bob mentioned. The additional cost and time for the permits will be recouped with the new value added.

You may have a slight increase in your tax rate due to the addition, but it will be based on your prop 13 tax rate. I can't tell you how many transactions for purchases and refinances have fallen through because of the lack of permits. DON'T DO IT!!

Tracy Williams
Mortgage Loan Consultant
310 489-2549 Cell
NMLS# 762891
0 votes Thank Flag Link Thu Mar 14, 2013
Thanks Bob, I understand it would not jeopardize Prop 13, but to clarify my question: would the slightly higher assessment be similar to those who are creating brand new additions, or would my increase be less because it is converting existing space to air conditioned space, simply opening up between walls?

To make it even more interesting, the pool room wall (where we would make the opening) joins a sun room that was enclosed in the 1960s and the previous owner never got permits to turn the sun room into interior space (or the permits were before the city microfiche archives). When we got some appraisals for an equity loan, appraisers were not completely sure whether or not to include the sun room as official interior space.
0 votes Thank Flag Link Sun Mar 10, 2013
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