Government Services: Homeowners
Cost of Property Taxes
- Based on the average provided by Mortgage Calculator, for all states, American homeowners are paying an average tax of $3,313.
- Homeowners are paying property taxes across all 50 states, which range from about $560 in Alabama to about $7,800 every year in New Jersey.
- The property taxes paid every year depends on where homeowners live. The states that have the lowest property taxes are those with low costs of living, such as Alabama, West Virginia, and Arkansas.
- "Homeowners that have a net income between $25,001 and $50,000 every year pay at least 10.2% of their taxable income in property taxes. On average, homeowners that have a net income in the range of $50,001 and $200,000 are paying between 4.8% and 6.3% of their taxable incomes as property taxes. Property taxes represent 2.2% or less of the net incomes made by the top 1% of homeowners. Millionaire homeowners are contributing about 0.6% of their net revenues to property taxes.
Cost of Homeowner Permits
- The national average cost of obtaining building permits for homeowners is $1,085.
- Homeowners are spending between $384 and $1,786 to obtain building permits. Depending on the city, the cost of a single building permit is often as high as $7,500, or as low as $100 in smaller towns.
- Building permits have different costs based on the structure involved. The typical cost of obtaining a permit for building a house is between $1,200 to $2,000. A permit for garage conversion costs between $1,200 to $1,500 — an electrical installation permit costs between $10 to $500.
- The average cost of other permits include roofing permit at $225-$500, permit for fence $60, permit for plumbing $50 to $500, HVAC installation permit $1,200-$2,000, permit for constructional activities $1,200-$2,000. A bathroom erection permit costs between $1,200 and $2,000, a deck installation permit costs between $0 to $500, a permit to erect a shed costs between $0 to $2,000.
- The permit for a pergola costs $0 to $2,000, building inspection permits cost between $200 to $500, a basement permit costs between $1,200 to $2,000, while a window permit costs between $260 to $600
. A demolition permit costs about $200.
Cost of Homeowner Tickets
- According to Digsafe, homeowners or their contractors in most states are required to call and obtain tickets/permits before carrying out activities such as excavations or digging the soil in their vicinity.
- Tickets are available to homeowners that need to dig or excavate around their properties at the cost of $25 per ticket. Digging permits are not valid without an adequate ticket number.
Property Tax: Missed Deadlines and Penalties
- There is limited information on the number of homeowners defaulting to pay late taxes on their properties when due.
- About 8% charge is added the due sum (as a penalty) for the first $1,500 worth of property tax delinquency, after which 18% is charged for the value of tax delinquency (overdue tax) above $1,500.
- The effect of other penalties associated with property tax delinquency (late payment penalties) gives rise to an interest rate above 24%, where the total misconduct/delinquency is above $10,000 per year.
Homeowner Permit: Missed Deadlines and Penalties
- Several homeowners are remodeling their homes without applying for permits. About 80% of homeowners do not seek/apply for a permit to effect changes in their homes.
- Several homeowners are remodeling their homes without permits as a way of avoiding delays. Others think obtaining a license/permit is difficult/troublesome. Some homeowners feel they won't get caught if they boycott permits.
- There is little information on the average fees charged for homeowners apply late for building permits. Homeowners often get bills "for the fines and penalties for failure" to obtain building/renovation permits.
- A recent case study of a late building permit involved the "county conducting many reviews" and cost the applicant/home seller about $8,000 to process. This charged amount is higher than the national average cost of obtaining building permits for homeowners at $1,085.
- Other disadvantages of homeowners applying late for permits include the fact that insurance might not be willing to cover a defect where a consent/permit was not obtained as at when due. Damage to property caused by fire might not get covered by the homeowner's insurance policy, where an improvement work gets finished without a permit.
- Some cities often require homeowners to tear out remodeling work done without a permit. This process constitutes additional costs and leads to wastage of resources.
Homeowner Dig Tickets: Missed Deadlines and Penalties
- Failure to obtain a dig ticket can result in fines as high as fifty thousand dollars(US$50,000), and homeowners could bear the repair costs when underground facilities are damaged.
- According to Dig Safe, there were about 1089 violation incident reports in Massachusetts in 2018 related to digging tickets. About 29% of the alleged violations based on invalid Dig Safe tickets or homeowner/contractor failure to notify Dig Safe Inc. before digging. The Massachusetts Division of Dig Safe collected $2,058,000 as civil penalties and also conducted about three training sessions to enlighten 108 first‑time offenders.
The research investigated the current state of homeowners' utilization of government services in the United States. The study investigated the property taxes, permits, and tickets. The strategy reviewed government agency publications such as the Tax Policy Center. An investigation was conducted to uncover the amount American homeowners are paying as home tax default rates as well as penalties. Tax Policy Center revealed that homeowners benefit from an economic term known as "imputed rent." Homeowners often get excluded from paying certain other expenses related to their federal taxable income. Homeowners often exclude, up to required limits, the capital gain made from the sale of a home. Additional insight to uncover the percentage (if any) of homeowners that default on other payable taxes outside the required limits failed to reveal the needed insights. These additional insights were not made public. The penalties for such actions were also researched but are not made public. The research also examined the rate at which homeowners pay property taxes as well as the frequency/rate at which they default to pay their home taxes. This strategy reviewed the number of homeowners that miss tax payment deadlines. The study examined business news publications such as Pulse/Business Insider. This strategy uncovered the average amount that homeowners pay as property taxes in the 50 states of America. There were no insights related to defaulters. The number of those defaulting to pay tax for their homes at state and community levels is not published. This information is not available. The revenue made from defaulters of property tax and the average fine charged to defaulters was investigated. Insights revealed that penalties/fines could be above 24% of the due amount, where the total delinquency is above $10,000 per year. There were no insights into the entire revenue made from late homeowner taxes/penalty fees. The study assumed that (total revenue from tax fines/average fine per individual homeowner) = the number of yearly defaulters. The study reviewed the resources of not-for-profit clearinghouses such as Dig Safe. This strategy examined the current state of homeowners'utilization of government services such as property taxes, permits, and tickets. Dig Safe revealed that some Americans are not obtaining permits before excavating or digging their premises. The Massachusetts Division of Dig Safe collected $2,058,000 as civil penalties from 1089 ticket violation incident reports. There were no insights into the national average violation rates. Dig safe did not reveal data regarding property tax violators or violation statistics related to other homeowner permits. Research for the total number of successful homeowner digging activities in Massachusetts that obtained a ticked did not uncover the required statistics. The study assumed that the total number of successful digging with tickets/number of ticket violations = rate of defaulters (those missing deadlines). Dig Safe did not reveal such detailed insights. There is no insight related to homeowner tax defaulters.
Due to limited statistics related to the current state of homeowners'utilization of government services such as property taxes, permits, and tickets, state level, and city-level statistics are provided in some instances, such as in the case of dig permit violations.