I know that when I appraise a property in a market where built in cabinets, appliances, flooring and light fixtures are typical and the house doesn’t have them I make a substantial cost-to-cure adjustment. For appraisal purposes, the dividing line between real property and personal property is the manner of affixation. If you have to glue, nail and cement in finishes, it causes damage and a hole when you remove them.
It’s a tax dodge, and I’ll leave it to the tax experts as to whether or not the tax code legitimately allows it. But those items are definitely not considered personal property in the market. Having said that, I know the tax code does allow writing off the actual costs of repairs and replacements of those short-lived items, so it’s not as if a property owner is being forced to take an actual loss if they claim it as realty rather than personal property. It seems to me that doing both would be double dipping.
