New construction refers to any building, structure, or improvement added to your property that didn't exist on the previous assessment date. This includes new homes, room additions, garages, pools, accessory structures, and major renovations that add value.
In Texas, new construction is assessed as of January 1. If you completed a garage on March 1, it won't affect this year's taxes—but it will be included in next year's assessment.
In California, new construction triggers a supplemental assessment mid-year. You'll receive a supplemental tax bill for the added value prorated for the remainder of the fiscal year, and your base year value increases permanently by the construction value.
New construction always increases your assessed value, but understanding the timing helps you plan.
Important considerations:
• Permitted work is automatically discovered (building departments notify appraisers)
• Unpermitted work can be discovered during site visits or aerial photos
• The value added may not equal your actual cost
• You can protest the valuation of new construction
• Major remodels without adding square footage may not trigger reassessment
Can you protest new construction value?
Yes. If the county assesses your new garage at $60,000 but you only spent $40,000 building it, you can protest with contractor invoices and receipts. The assessment should reflect actual added value, not inflated estimates.
How new construction affects your taxes:
Texas example:
• January 1, 2024: Home assessed at $350,000
• March 2024: You build a $75,000 pool house
• 2024 taxes: Based on $350,000 (no change mid-year)
• January 1, 2025: Assessment includes pool house
• 2025 assessment: $425,000
California example:
• July 1, 2024: Home base value $500,000
• October 2024: Complete $100,000 addition
• November 2024: Receive supplemental bill for $100,000 value (prorated)
• New base year value: $600,000
• Future annual bills based on $600,000 + 2%/year
Building permits trigger reviews—the county will assess new construction value based on permit costs and inspection data.
It depends. If you didn't add square footage and kept the same footprint, it's typically not 'new construction'—though the improved condition may be noted and increase value. If you expanded the kitchen or added square footage, that would trigger reassessment.
In Texas, new construction is valued as of January 1. Improvements completed during the year won't affect that year's taxes but will be assessed the following year. In California, you'll receive a supplemental assessment mid-year when construction is completed.
You don't have to actively report it in most cases—building permits automatically alert the appraisal district. However, in Texas, business owners may be required to file a rendition reporting property improvements. Failing to disclose can result in penalties.