What's the advantage of keeping a couple of walls when rebuilding

6 Replies

Hey guys,

I'm planning to convert my 1 story 1000 sqrft home to a 2 story 2200 srft home, in los angeles, CA.   My house is so old that financially it's not worth keeping anything. But I hear there are benefits (tax & ...)to keeping some parts to declare it as a remodel to city/state. 

What are the benefits and how do i figure out more details about it?

Thanks,

Peter

Originally posted by @Peter Navid :

Hey guys,

I'm planning to convert my 1 story 1000 sqrft home to a 2 story 2200 srft home, in los angeles, CA.   My house is so old that financially it's not worth keeping anything. But I hear there are benefits (tax & ...)to keeping some parts to declare it as a remodel to city/state. 

What are the benefits and how do i figure out more details about it?

Thanks,

Peter

 In some cities, keeping a wall or two (whichever they specify locally) makes it a remodel instead of a new build. The plan approvals are usually faster and cheaper. The problem is that the tax records will still show the original construction date and you won't get the benefit of marketing it as a new house. 

I would expect that most benefits would be with the building department.  In Phoenix you can avoid the requirements for a grading and drainage plan, soils testing and building pad by classifying as a remodel instead of new build.  You can also get the permit faster, so check with your building department. I would be surprised to hear that there are any tax advantages but then again, I guess anything is possible in CA.  Account Closed is correct, if you are planning to sell the property there is a lot of benefit in marketing as a new build. 

Also, keep in mind that the efficiencies of going 100% new construction usually outweigh the cost of rebuilding a few walls.  You would also eliminate the design constraints of working with the existing structure.

@Peter Navid Sounds like that would be more of a headache, but I suppose if the benefits outweighed that it would be worth it. I'd try going to a meetup in your area and/or reaching out to people in your market on here that may be able to help. Or ask a real estate attorney. 

Here in RI , in some towns, it can matter if you are allowed to  rebuild.  It is all about the building department and their regulations. 

 We had a friend in upstate New York who could only build his house in stages because if he knocked it down he would not be allowed to rebuild.  First he put a new foundation under the current house and then he rebuilt the top of it. It was more expensive but in his case it ensured he could replace his lakefront home. 

Every town is a little different.  Go in to town hall and speak with the building department.  The main benefit of being "grandfathered" by using the existing structure is that setbacks and construction techniques can also be grandfathered.  In many cases zoning has changed over time so that the property line setbacks and minimum lot sizes are much larger, which could render your lot useless for new construction.  You would then need to pursue a variance which is not guaranteed.

Also, don't knock down any garages or sheds without first talking to the town for the same reason.  Some times you can do a demolition permit which documents what is on site so it can be brought back later.

Most of the time its done to "grandfather" you in.  In many cases if you completely knocked something down, you wouldnt be able to rebuild as codes, setbacks etc have changed over the years.