Call the assessor’s office and ask them about it. I think you have a valid argument regarding the work not altering the assessment, and certainly not at the full cost.
FWIW, we did major renovation and addition work on our house when we bought it, so had to fill out the same form when it was all completed. In our case, it really did add quite a bit of value to the house (additional rooms, bathroom, laundry room, expanded kitchen, etc.). Not sure exactly how they calculate it, but they did NOT add the full cost to the new assessment.
While SK is correct about the additional *tax assessment* not adding to your cost basis, the actual cost of the work completed should probably be applied to your cost basis (SK, please correct me if I’m wrong on this as this is your area of expertise). Of course, if they keep the $250K/$500K tax exclusion on occupied housing, it probably won’t make much of a difference…but with Janet Yellen at the helm of the Fed, who knows?
