Q: What types of jobs need a permit, what is considered a capital improvement, what do I need to know about either of these?
One of the common areas for confusion during any electrical project (or any home improvement project) is the gray area around permitting and capital improvements. It may seem easier to avoid these steps and associated fees to “keep things simple” but in reality the permitting process isn’t hard and offers good protection for improvements made to your home and declaring capital improvements offers the added benefit of saving sales tax.
As a company, Dynamic Electric suggests erring on the side of compliance and correct processing of permits so that any issues or concerns are covered at the time and not popping up in the future. Additionally, you may want to check with your accountant or other professional if you have more complex issues. Be wary of companies that may suggest they can skip these steps and save a few dollars at the time.
Permits:
Permits are the process that both notifies the county/city that you live in that you are doing work and also affirms that the work has been done correctly and meets any building codes. Fees and processes vary a bit from jurisdiction to jurisdiction (city vs. county etc.) but the basic permit is to notify (apply for a permit) and pass the various inspection points as the work is completed. Most inspections, especially if working with a reliable contractor, are simple check-ins to assure the work is complete and up to standards.
Roughly the standard question for if a job requires a permit is to ask if the work is “making a repair” or “one to one change” vs. “replacing/improving a system”. Generally replacing a light fixture, moving an outlet, switching to a ceiling fan does not require a permit. Larger improvements should be permitted especially if you are expanding or improving a major system.
Permitting can add $125-$600 to a job depending on the level of inspections/size or complexity of the job and city/jurisdiction. Most contractors (including Dynamic Electric) add a fee to manage the permitting process however homeowners can also elect to mange the process themselves.
The caveat about deciding to manage your own inspections is that it can take a decent amount of homeowner involvement, multiple phone calls and scheduling. Some homeowners are happy to take this on but be sure to weigh the benefits-burden of DIY for each job. (Ask your contractor if it is an option-how it works.)
Capital Improvements:
Depending on the size and scope of your job, you may be asked to complete a Capital Improvement Affidavit. A capital improvement is generally considered anything that substantially increases the value, extends the useable life or increases use-ability of your home. They can also provide documentation to show that a home or business may have increased in value if you are thinking of selling or refinancing. The biggest benefit if having a CI Affidavit is that you no longer pay sales tax on the labor– that’s around 7.5% in our area! (In 2016 – the law changed and both services and products are subject to sales tax for most home improvement services.)
Ultimately:
If you have questions about if you job needs a Permit or meets the Capital Improvements standards, be sure to discuss this with your contractor before your job starts. It can make a huge difference in a “smooth process” and will give you good peace of mind in going forward. As always, let us know if you have questions!
Ask the Electrician is a column we publish with our advertising partner WCHL/Chapelboro. In “Ask The Electrician,” Scott answers common questions about electrical work, from switches and outlets to safety issues and preventative maintenance. If you have a suggested question for us to answer – or need an electrician – please reach out to our office.
See the article on Chapelboro.com: Permitting, Capital Improvments and More