Annexation

Definition of "Annexation"

Written by

Jennifer Dreggors

Berkshire Hathaway Executives

There are two definitions of annexation in real estate. The first definition of annexation in real estate deals with the expansion of cities and the accompanying zoning laws. When a city expands its jurisdiction, property taxes and local laws can change and affect landowners differently. The other definition of annexation is in regards to personal property that is separate from the property to which it is attached or on which it is located. Let’s look at a couple examples that illustrate both of these concepts. 

Examples of Annexation in Real Estate

First, let’s look at an example of annexation in sense pertaining to local government. For our example, we’ll use a middle aged man named Phil. Phil lives just outside the city limits of the small Georgia town in which he owns and runs his own bakery. One day, Phil receives an official notice from his local city government: the city is expanding its jurisdiction, and his home now falls inside the city limits. As a result of this, the letter informs him that his property taxes will increase, and real estate values will be increasing drastically. This example illustrates the first type of annexation in real estate.

Now, we’ll look at an example of the second type of annexation. When a piece of property is to be sold, certain assets that are currently situated on the property or attached to it can be specified in the bill of sale that this property is not part of the property being sold. For example, in the sale of a ten acre plot of land it might be specified that the portable shed currently on the property is not part of the property being sold. After the seller and buyer have closed on the deal, the seller is within his rights to come and annex the portable shed and any other property that was specified as not being part of the property being sold.