I have a motivated seller of a distressed home that has about 650 sq ft more than the tax records show. In other words, he built on to the back of the home (not visible from the road) and apparently did not get building permits and has been paying the property taxes on the original floor plan before the addition. In other words, he has evaded paying taxes due.
What are the ramifications of the sale when the county inevitably finds out this house is actually more sq ft and never reported?
Obviously, the home could be sold as the old sq ft and the investor/buyer can just go and permit it for the increased sq ft, but I would think that the county automatically will go and assess the home as soon as it changes hands since this the county has probably seen this before. Can the county go after the buyer for back taxes? Can they hold up permits, etc. ?
If anyone can shed some light here would be appreciated.
This is really a very local question - most of us elsewhere in the country can't answer it for you.
In most areas of Texas, except for Dallas, Austin and Houston, nobody would care.
In many blue states, they go bugnuts over stuff done without permits. (Unlike those great projects like the Big Dig in Boston, which had permits out the ears, and was inspected a million times, and still turned out to be crap work.)
I think of Georgia as a relatively free state, but then I think that about Arizona, too and found out recently that you need a license there to be a painter. So glad the government is using tax money to save homeowners from the scourge of a bad paint job. (Except I'm guessing you can be licensed and still do crappy work - that's how it is in most professions.)
In any event, you'll need to talk to other investors local to you and get that answer. Internet strangers from all over the country may have opinions, but few real answers.
In the majority of states, property value is assessed for property tax purposes every five to seven years. However, some states only assess the value of the home upon the sale or refinancing of the property.
Clayton county confirmed with me that if they did miss an addition to a property, they can't go back and charge you for it but moving forward, once it is re-assessed by an appraiser the new property sqft would be recorded by the county and a new property tax will reflect moving forward.
Clayton County Tax Assessors Info/ Tel#:
You can also contact your local government appraiser and or find notice of assessment information:
claytoncountyga.gov > tax accessor (gov tab) > link > assessment > current year > local appraiser / notice of assessment info.
To answer your question no the county cannot go after the buyer for back taxes - they can only re-adjust and apply the appropriate taxes moving forward.
Thank you Ruben Kanya and Michael Hayworth for your replies!
It is a relief to know this should not scare off investors. This property is in the Atlanta Metro area and yes, the outer rural counties are less stringent about many things. As you get closer to heavier population it seems more regulated.
Now it is on to the comps for me!
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