I didn't say that the permit itself cost several thousand dollars. I said that the cost of doing it under permit was several thousand additional dollars. For example, my humble 2-bed, 1 bath house was originally built in 1948 with a 70-amp service panel that was upgraded by the previous owner to 100 amp. Some of the original outlets previously shared a circuit and I would've kept it that way, but with the remodel under permit they now have to be dedicated, even if the actual current draw is almost nil. For example, I have an antique (1940's) gas stove, and the only electrical component on it was the 40 watt decorative light bulb... now on a dedicated appliance circuit.
I bought a new tankless water heater and installed it on an outside wall. Dedicated circuit (only runs a small fan and a microprocessor), service outlet, service light (even though it was 5' away from the back porch light). Those are just a couple of examples. All told, the number of circuits exceeded my panel, and it was too old a panel to accept split breakers. A new 200A panel was required, which triggered a different weatherhead.
so now I have 200 amps for a 2 bed, now 2 bath house, occupied by 2 people plus the occasional houseguest.
The 1" gas line from the meter entered underneath the house, turned left for 2' to a tee, and emerged again to the tankless WH.
"Sorry, we have to see the 1" line tee directly off the meter, otherwise someone may tap off that 2' length in the future and take away gas from the tankless."
I had to have a plumber come in with black iron to redo everything under the house. (On old houses, once you start, you've got to keep going to a clean, logical stopping point.)
And yes, the property tax will increase once I do my final inspection. I kept it open through the end of the year to avoid the property tax increase for 2010.
Is my house safer? On paper, yes. In reality, my old service was just fine and we rarely blew a breaker. The tankless worked just fine before they made us re-pipe it.
BTW, I went back and rewrote the electrical + plumbing contracts to count as much of the cost as logically possible towards the installation of the tankless water heater. That will get me a max. $1500 tax credit for 2010.
PS. If I had added actual square footage, then yes the cost of the permit would've been several thousand dollars due to all the extra fees described by other on this thread. For example inn the so Cal city of Pasadena, the in-lieu affordable housing surcharge for additional market-rate housing on the west side of town is $45 per square foot! that doesn't count park fees, school fees, traffic signalization fees, sewer facility charges, etc... all in addition to the plan check and permit cost.