Putting a swimming pool in your home does indeed sound nice especially when you factor in the leisure swimming that you can do on top of how the value of your property can instantly soar high just by adding this improvement. But while an increase in property value does indeed sound nice, does putting a swimming pool in your home also increase property taxes in line with the increase in its value?
An in-ground swimming pool is a permanent improvement, so it will increase the property value and the taxes you pay for it. But an above-ground pool is movable and will therefore not increase the value and taxes of your property.
So, as you can see, the increase in property value and property taxes actually depend on one single factor, and that is whether or not your pool is in-ground or above-ground. From then on, let us talk more about what happens with your property taxes when you have a pool introduced into your home. That is where you should decide which kind of pool is best for your home and your family.
Does an above-ground pool increase property taxes?
It is always going to be nice to have a pool in your home especially when you just want to take a nice dip in the comforts of your own property. That’s why plenty of different homes around the world have swimming pools in their own homes as you just cannot deny the fact that it would be great to enjoy a quick dip in it whenever you want to relax.
On top of how a pool can be a great way to spend a leisurely day, it can also be great at increasing the value of your property in case you want to sell your home in the future. That means that introducing an improvement such as a pool can easily drive the selling price of your home up so that you can reap higher profits when it is sold.
However, this is true when it comes to in-ground pools. The reason is that in-ground pools are more or less permanent improvements to the property and cannot be removed so easily. As such, because of how in-ground pools cannot be removed without having to hire someone to expertly remove them, it would increase the value of your property.
And in line with how your property value increases, your property taxes will also increase as well because of the very fact that your house is now worth more. The higher the value of the property, the higher the taxes. So, in that regard, by introducing an in-ground pool to your property, you are effectively going to end up paying higher taxes because of the increase in the value of your home.
Again, let us go back to the fact that an increase in property value and property taxes will apply when you are introducing an in-ground swimming pool that is more or less a permanent fixture to the home. So, in that regard, what happens if you introduce an above-ground swimming pool instead of an in-ground one? Will your property value and taxes increase as a result of having an above-ground pool in your home?
Before we get to that, let us first look at an above-ground swimming pool and how it differs from an in-ground swimming pool. An in-ground pool is one that is built into the ground of the property while all of its other fixtures such as the pipes and the filter are built into the ground as well. In comparison, an above-ground pool does not rely on fixtures that are built into the ground because the pool is simply built above the ground. In some cases, it might even be a portable pool that you can simply set up in an instant.
Because above-ground pools do not require you to build the pool itself as well as its fixtures into the ground, it isn’t considered a permanent improvement to the property. The law even considers above-ground pools to be movable from one property to another because you can simply take apart the components and rebuild them on the ground of another property.
So, going back, since an above-ground pool is not a permanent structure and can still be removed any time without doing plenty of work on the property itself, it will not drive the value of the property up no matter how big or how good the above-ground pool maybe because you can simply take it apart and move it to another property.
Following the fact that above-ground pools do not drive the property’s value up, it also follows that the property taxes do not increase as well. When your property value remains untouched, the property taxes are also not affected. It’s as simple as that. It does not form part of the land and can easily be taken apart, which is why it isn’t considered a permanent improvement to the home.
While it may be true that there are some above-ground swimming pools that may need to have some work done to remove them from the property, removing them will still be comparatively easier than removing an in-ground pool.
The reason is that you can just simply take out some bolts and carry the different parts if you want to remove an above-ground pool. Meanwhile, removing an in-ground pool involves a lot of work as you have to have some demolition work and landscaping to be done on the property if you want to remove an in-ground pool.
In that regard, it becomes quite easy to understand why above-ground pools are not considered permanent structures and will not increase the property value of your home. This might not be great for those who are looking to sell their homes in the future but it should work fine for those who don’t want to end up paying higher taxes as an above-ground pool keeps the property value as is.
How much do taxes go up with a pool?
So, if you do indeed introduce an in-ground pool to your home because you simply prefer its aesthetics and its functionality over an above-ground pool and because you want to drive the property value up in the hopes of selling the house one of these days in the future, you already know by now that your taxes will also increase as a result of the increase in the value of your home.
But how much does your property taxes increase when your property value increases as a result of the addition of a permanent improvement such as a swimming pool? Well, the answer really depends.
First of all, you have to know that property taxes are proportional to the value of the property itself. That is why property taxes increase when the value of the property increases considering the fact that property taxes are not fixed values just like how your income tax also increases when your income increases.
Second, the increase in the property taxes you would have to pay due to the addition of a swimming pool depends largely on how much your property value increased because, again, it is a proportional value that depends on the value of your property. So, if your property value increased by 10% as a result of the in-ground swimming pool, expect that your property tax will also end up increasing by a proportional value of 10% as well.
And third, the increase of your taxes can vary because of how an increase in property value can also vary depending on certain factors. In that sense, a simple introduction of a pool will not give a fixed increase in property value because there are still factors to look at such as the location of the property and the size and overall quality of the swimming pool instead.
However, in most cases, the increase in property value ranges from 5% to 30%. So, in that sense, your property taxes can also increase from 5% to 30% depending on how much the value of your property increased.
Is putting in a pool tax-deductible?
At this point, it is safe to say that you already know that an in-ground swimming pool is something that will increase your property taxes as a result of the increase in your property value. However, will you still be able to qualify your pool for tax deductions even if your property value increased as a result of its introduction?
Yes, a pool can be tax-deductible depending on the reasons why you introduced the pool to the property. The most common reason for a pool to qualify for tax deductions if it was introduced primarily for medical reasons. It could be because you are suffering from arthritis and moving in a pool helps you. As long as you can prove that your pool was introduced or built due to medical reasons, you could qualify for tax deductions.