Posts Tagged ‘home owners’

How the New Tax Reform Could Effect Real Estate

Thursday, September 28th, 2017

If you own a home or are thinking about purchasing one, you need to be aware of how the new proposed tax reforms could effect you and the effect they may have on the real estate market. Here are some of the proposed changes:

Tax Increases/Doubling of the Standard Deduction. Taxes could increase for hundreds of thousands of California homeowners, and this will hit the middle class hard. It would also put homeownership out of reach for many buyers.

Recently the National Association of Realtors stated that increasing the standard deduction and erasing others would “effectively nullify the current tax benefits of owning a home” for the majority of people. This could reduce housing demand and home values.

Elimination of State and Local Tax Deductions. These deductions make home ownership more affordable. This could include property taxes, and if implemented homeowners could see a rise of up to $3000 annually, leading to plummeting home values. Potential buyers may not be able to afford property tax increases, pushing them into lower price ranges. Homeowner equity would suffer.

If these new tax laws are implemented it will be a big hit to the housing market, with home purchases slowing  or even grinding to a halt; more importantly, we could face large foreclosures waves heading into the future, which of course could have big implications for the mortgage and banking industries.

Hopefully we will soon see some clarification regarding these proposed changes. Write your Congressional representatives and express your views on the new tax laws. Unless you exist in the 1% of the uber-wealthy you will not likely benefit from the expected changes.

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Qualified Home Owners – Save in Taxes on Next Home Purchase

Tuesday, May 30th, 2017

People are always asking me how they can save money on home purchases and sales, and legislation under California Propositions 60 and 90 is one of the best ways to do just that. BUT, you have to meet certain qualifications.

Proposition 60 and 90 help home sellers transfer their current residential tax base to the purchase of a new home, saving potentially thousands of dollars in taxes. Proposition 60 is for intra-county transfers (between the counties of San Diego, Orange Los Angeles, Riverside, Alameda, El Dorado, San Bernardino, Santa Clara, San Mateo, Tuolumne and Ventura. Proposition 90 allows for the same advantage with inter-county transfers.

This all sounds great, right? Here is the fine print…in order to qualify:

1. The home owner (only one of them) must be at least 55 years of age. Co-owners cannot both qualify.

2. The home being sold must be a principal residence

3. The present home must be sold and the new home must be equal or lesser market value to the original property

4. If the property is held in a trust the seller will need to be the beneficial owner of the trust, not merely the trustee

5. The replacement property must be purchased or built within 2 years (before or after) of the sale of the current property.

6. “Your original property must have been eligible for the homeowners’ or disabled veterans’ exemption either at the time it was sold or within two years of the purchase or construction of the replacement property.”

As an example let’s say you purchased your home many years ago for $400,000 and it’s current market value is $800,000. If you sell this home and purchase a home that is $800,000 or less, should you qualify under Proposition 60 or 90 you will be able to take your current tax basis (tax on the $400,000 home plus the increases that have accrued over the years) to a replacement home that is purchased for $800,000 or less. This is a huge savings because most counties tax about 1-1.25% on real estate purchases.

For more details on eligibility requirements to take advantage of Prop 60 or 90, click here.

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Check in With Your Home this Fall

Thursday, August 29th, 2013

As summer winds down, kids go back to school and the weather starts to cool, Fall is a great time to “check in” with your home. It is great to do this twice a year to keep your home in the best shape. Here are some things that you may want to consider looking into before heading into the winter/holiday season, to assure that your home runs efficiently and to prevent costly maintenance issues down the road.home_repair

Clean filters. Heating/air filters should be replaced twice a year. If you have the permanent kind, it is simply a matter of hosing them off and letting them dry out before reinstalling.

Check functionality and change smoke alarm and carbon monoxide detector batteries.

Get a termite inspection. This is something that is most important, yet many people don’t ever do it. Many companies offer free inspections, so it is merely a matter of figuring out when you can be home to have one done. It is not only good to assure you are termite free, but there could be other pests or rodents nesting you attics and other places, and there could be wood rot around your home that if left unattended, may be expensive down the road.

Change filters in your refrigerator, water purification systems and softener systems

Clear and check rain gutters. Keeping them clear could prevent water damage to your home once the rainy season hits.

Check sprinkler systems for any broken or misdirected sprinklers, and any leaks

Clean dryer vent to outside of home. Many homeowners neglect to do this – ever. It is simple to do with a ladder and narrow brush with a long handle. It can prevent fires.

house_disrepairCheck under all sinks for running water or signs of leakage

Make sure toilets are secured to floors. If not, it is very simple and very cheap to re-caulk

Check caulking around showers and tubs. Again, caulking is very inexpensive and easy to DIY. Ignoring it could lead to water intrusion underneath showers and tubs and in walls – what could be a very costly problem down the road.

Check your roof. If you have not done so in a long time, it is important to have your roof checked. Time and weather can loosen or crack tiles or other roofing materials. It is smart to have a roof inspection at least every few years, as it could save you time and money.

Trim trees. If you have trees growing close to your home, it is imperative to keep them trimmed so that rodents and other critters cannot use them to access your roof and attic.

Check your water heater for signs of leaking. If it is over 10 years old you may want to consider replacing it before you have a problem. Call a service company to provide an analysis.

Trim any brush around your property that could catch fire

Replace torn/broken window screens

Clean your home. This can be fun by getting the entire family (or roommates, etc.) involved. Eliminating clutter will keep things clean, help maintain your home,  and will make problems easier to spot down the road.

The above are just some suggestions to keep your home in tip top shape, and many items can be DIY items. If you don’t want to do it yourself or don’t have the time, you can call a handyperson (who will be able to take care of many things on the list, but not all), or you can pay a home inspector to come out and check everything. Of course, depending on the location of your home there may be other items that are important to include in the list. Maintaining your home will keep it from falling into disrepair, which can end up costing more money in the future.

 

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