A tear down can be a double whammy against you. Appraisal districts impute value to habitable improvements but buyers deduct for the cost of removing them.
A tear down is usually a property where the land value exceeds the improvements value by a wide margin. For example, a Property Tax Protest client lived in a property where the land value was $1,200,000 and the improvements value was $440,000. That ratio of land to building indicated that it was a tear down because no buyer would pay $1,640,000 to live in a home valued at $440,000 when he can pay $880,000 for a similar home on a lot of equal value to the improvements.
The appraisal district’s argument was that the improvements are habitable and therefore have value. True enough but the value is only to the current occupant, not to a potential buyer.
The market does not recognize habitability value to the current occupant. For example, an owner who remodels a property to accommodate unique physical disabilities (elevator, widened doorways, disability bars on walls, fire escape, etc.) will have more invested than the market will support. Habitability is personal to the inhabitant, not to the market. (The District recognizes this when it values a pool at less than cost to the current occupant; not everyone wants a pool.)
We obtained a reduction from $1,640,000 to $1,150,000 which was $50,000 less than land value. We argued that the cost of removing the improvements reduces what a buyer will pay for a tear down. We can do the same for you.
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