I’m moving to Florida to be near my grandchildren. My daughter wants me to build a $150,000 addition to her house. Should I do it?

I live in the Chicago area and recently retired. My daughter and her husband live in Florida.

My wife and I thought about buying a condo in Florida so we could be closer to our grandchildren. But the upkeep and expenses of two different residences is not something I care to deal with.

My daughter suggested that we build an addition to her house and use it every time we visit or live there, if we ever decide to move to Florida.

I am willing to pay for the addition, but I am not sure if the $100,000 to $150,000 will be considered a gift that my daughter and her husband will have to report to the Internal Revenue Service and pay taxes.

Also, although I don’t foresee the marriage falling apart. What would happen if it did? If so, what rights do we have? How would the property be divided?

Family man

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Dear family man,

Congratulations on your retirement, what a milestone! At this time in your life, I’m sure family is everything. And being able to see your children and grandchildren whenever you want is a priceless luxury.

But you are right to have such questions about your living arrangements.

The simplest route: Sell your house in Chicago and buy a condo in Florida, but you don’t seem interested in that option. So let’s consider her daughter’s suggestion: Build an “add-on” to her house.

Is your daughter proposing to build an accessory dwelling unit (ADU)? Or is she thinking of building an extra room?

If it’s the former, which is sometimes referred to as a granny flat or backyard house, then yes, it will likely incur taxes as it’s increasing property value. And that could, as you mention, complicate ownership.

For those unfamiliar with this option, an ADU is a smaller property that is built next to or near the primary residence and is an excellent solution for providing affordable housing.

“It’s a single-family home on a smaller scale — it’s got a bathroom, it’s got a kitchen, it’s got a bedroom, a living room,” John Geary, co-founder of Abodu, a startup that makes ADUs, told MarketWatch.

“This is a smooth way to add housing supply without changing the fabric of our neighborhoods,” he added. The average size of these units is around 500 square feet, but they can be smaller or larger depending on your needs.

But there are some potential complications with that, including zoning laws that may prohibit your daughter from building one for her, so be sure to check that out.

Renovate your daughter’s house instead

On the other hand, if you’re talking about expanding the house, the cost of renovation in parts of Florida can be as high as $250 per square foot, Justin Pekarek, broker and owner of Orlando Property Advisors, a boutique firm, told MarketWatch. .

Again, since your addition of $100,000 to $150,000 will improve the value of the property, you will likely incur taxes on it. I’m sorry, but there is no way around it. Pekarek said the tax assessor closing permits will increase property taxes as the assessed value increases.

And your daughter and husband may also need to check with your HOA to make sure planned renovations are allowed.

If you want to prepare for the possibility of the happy marriage falling apart, Pekarek said things will get a bit more complicated.

Even if it’s a separate structure linked by a common corridor, it’s still considered a dwelling on a single parcel or lot, Pekarek said. “There is no way to ‘split’ the property and have two owners unless the title is in a real estate trust without a mortgage,” he added.

So back to my original point: It may be easier to just buy a condo. If you don’t like paperwork and/or are risk averse like me, the hassle of going through renewals seems like too much. Also, if things go wrong in the marriage, you’re stuck between living there or in Chicago or living in your own Zen condo.

Plus, “the taxes, HOA and insurance on a $150,000 condo aren’t that high,” Pekarek said. So weigh carefully both options

Family is everything. I’m sure Florida’s weather is a big plus, considering Chicago’s frigid winters. In fact, looking at all the people on Redfin.com RDFN,
-11.02%
looking to move to Cape Coral, Fla., the top destination of origin was Chi-Town, according to this third quarter report from the real estate broker.

But is it worth going through such a complicated process and worrying about property and taxes for an extra room in your daughter’s house?

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