No tax break for mortgage help.  (Example).  A young man lives in his girl friends home (she is the title holder and is responsible for the note) and pays half of the mortgage, insurance and property taxes expecting that he will get a tax deduction.  NO, he will not because he is not legally obligated to make the payments.  Should there be a default for nonpayment, he would not suffer any adverse consequence except to find a new place to live.

Problems faced when home permits are ignored.  

Often people do work on their home (add a room; change the garage) without getting a permit for the work.  When the property is put on the market to sell the seller must inform the buyer that the expansion and other home improvements were done without a permit(s). 

This poses a problem for the buyer because (a) if they accept and purchase the property knowing about the absence of permits, they in turn become responsible; (b) generally when the property is appraised the unpermitted work will not be included in the appraisal; and (c) the buyer should seek a significant purchase discount for the risk they will undertake.

The resolution to the problem can be expensive and difficult.  The City/County planning department can have the un-permitted work torn down and have you re-do the improvements.  Or the City/County inspectors can have you tear down part of the improvements (ie., some walls) to view the electrical and other utility items for inspection.  Or the City/County can accept everything as is and have you apply for a permit but hit one with a fine and other costs for failing to get a permit.

Should the seller be mute on the subject (ie., not tell the buyer of the un-permitted work) there can be a possible law suit.  If the lending company is unaware of the un-permitted work, they too can take legal action against both the buyer, seller and possibly the appraiser and it could extend to the listing/selling real estate agents as well as to the title and escrow company.  When it becomes a legal situation the old adage rules:  "throw mud against the wall and see what sticks".

Of course when the assessor is made aware of the increased floor space to be sure that entity will probably increase the property taxes and also seek payment of back taxes.

Oh one more thing....in case it is needed the cost of the permits can be added to the basis of the property.

By not obtaining the permits one faces severe and costly consequences to resolve the situation.  In the long run people find that getting the permits upfront is far cheaper than the added headaches incurred by not having them.