How Does Building a Sunroom Impact Property Taxes and Homeowner Insurance Premiums?

Adding a sunroom to a house can be an attractive option for any homeowner. Turning an existing patio into a sunroom or simply creating an addition can extend the square footage and essentially provide an extra room to a house. However, extending the footprint of a house in this way means paying higher property taxes and home insurance premiums in addition to the costs of the materials and labor.

Increase in Property Tax

In order to build an addition on to a house, permits are needed from the local government. When these permits are acquired, a tax assessor is notified and they will visit the home upon completion of the project in order to assess the new value of the home for tax purposes. It is important to know that these additional taxes will not have to be paid until the assessor performs their assessment, which can often take some time.

Increase in Insurance Premiums

Since a sunroom is an additional part of a home, it requires additional insurance coverage. Upon completion of the project, the insurance company must be notified to update the policy, which will increase the homeowner insurance premiums. When doing this, it is important to note the quality of the materials that are used since this will impact the payout should a claim ever need to be filed. This cost can be offset by performing other repairs, such as updating roofing, plumbing, or electrical wiring, which can all reduce insurance premiums.

Increase in Home’s Value

While these additional costs to the building of a sunroom may be discouraging, it is important to keep in mind that the home’s value has also been permanently increased. In the event that the home is ever sold or borrowed against, this increase in value can more than make up for the costs that are incurred in building it. The resale value of a home with a sunroom can be dramatically affected if it is in an area where sunrooms are in high demand or low supply.