Today, the Wall Street Journal published an online article exploring the different ways China and the US are using property taxes to stimulate the economy. China may be considering a property tax to “dampen” their possible housing bubble. Whether this will keep China from experiencing a housing crash is up for debate, but it certainly didn’t keep the US housing market from plummeting.
On the other hand, people in Indiana, New Jersey and New York may see reduced property taxes to help stimulate their local economies. Here are the facts as stated in the article:
In Indiana, Republican Governor Mitch Daniels has already lowered property taxes on homes to 1% of assessed value. In New Jersey, Republican, Governor Chris Christie has introduced a reform package that would cap property tax increases to 2.5% each year. And in New York, Democrat Andrew Cuomo has just announced his candidacy for governor with a call for a 2% cap on property tax increases.
So, will property tax caps help homeowners? Are the caps good? Bad? This article explains that it depends on how you think of government. If you see shortfalls in city and state budgets as a revenue problem, you probably think property tax caps are a bad idea. Alternatively, if you think of budget shortfalls as mostly a spending problem, you will see a property tax cap as a tool to control that spending.
Read the full article here.
Showing posts with label home owners. Show all posts
Showing posts with label home owners. Show all posts
Wednesday, May 26, 2010
Thursday, April 22, 2010
Existing U.S. Home Sales Climb to 5.35 Million Rate
From Bloomberg.com:
Sales of previously owned homes in the U.S. rose in March for the first time in four months as buyers took advantage of a government tax credit and the weather improved.
Purchases climbed 6.8 percent to a 5.35 million annual rate, more than anticipated, from a 5.01 million pace in February, figures from the National Association of Realtors showed today in Washington. The median prices climbed 0.4 percent from March 2009.
The thawing out from February’s blizzards probably helped the market last month, while the Obama administration’s credit worth up to $8,000 may keep underpinning demand through June, when it’s next due to lapse. The outlook for the second half of the year depends on the speed and magnitude of the recovery in the job market, indicating the housing rebound may be slow to develop.
“You have some fundamental improvement in housing,” said Stuart Hoffman, chief economist at PNC Financial Services Group. Inc. in Pittsburgh. “Housing is coming back. It’s still got a long way to go.”
Monday, January 26, 2009
Top 10 Deductions and Credits for Homeowners
From an outsider’s perspective, owning a home may look like it comes with all kinds of expenses. But when you look at all the tax incentives homeownership has to offer, you may see things differently. To help my readers understand the true value of their homes, I have put together the following list of the top 10 deductions and credits for homeowners.
1. Local Real Estate Taxes
Every homeowner pays an annual real estate tax on his or her home based on its value. However, what every homeowner does not know is that this tax is fully deductible. The federal government allows you to deduct the amount you spent on local taxes—this includes local property taxes.
2. Moving for Career
New homeowners who have recently moved to a new area for work purposes are allowed to write off their moving costs. As long as the new job meets certain distance requirements, you can write off moving costs, motor vehicles, household goods, and any other moving associated goods. A few other restrictions do apply, so be sure to check any large moving deductions by a tax professional first.
3. Casualty Losses
If a fire or storm damaged or destroyed your home, you may be able to deduct the associated expenses as casualty losses. However, there are a lot of rules and restrictions, and the actual amount you can deduct will vary upon your location and the amount of damage.
4. Home Office
If you work from home then you may be able to deduct your home office expenses. However, this deduction is a little tricky, and the office needs to have it’s own room in your house.
5. Health-Related Improvements
Home renovations or other home expenses made for medical reasons can be deducted. This includes any expenses made specifically for an ill or disabled person living in the home. Some common examples of this deduction include handicap ramps, special air filters or air conditioners, and swimming pools to help treat illnesses.
6. Mortgage Interest
The IRS allows you can deduct all of the interest you pay on your mortgage for both your first and second home, up to $1.1 million. In fact, the mortgage interest deduction is the largest single tax break in the tax code.
7. Paid Refinanced Loan Points
Refinancing can be a pain, but it does come with its advantages. If you recently refinanced, then you can deduct points you paid for the new loan. However, you cannot deduct all points at one time. You must divide them evenly throughout your loan. For example, if your loan was for 20 years and you have 40 points, you can deduct 2 points a year.
8. Green Credit
There are dozens of credits available for "green" renovations. These credits range from getting solar panels to purchasing more energy efficient kitchen appliances. These types of credits are great to take advantage of because they help you save both money and the planet at the same time!
9. Selling Costs
In addition to deductions and credits for owning a home, there are also benefits if you decide to sell your home. Legal fees, advertising expenses, real estate agent’s commission, title insurance, and any other expenses associated with selling your home are deductible. The IRS will even let you include things like landscaping and painting in your selling costs if you complete them with the intention of making the home more saleable.
10. Vacation Home Incentives
Many homeowners are unfortunately under the misconception that you can only receive tax breaks for one home. However, you can deduct real estate taxes, mortgage interest and points, and personal property taxes spent on a vacation home.
No matter what deductions you consider, always check with an expert before sending in your tax forms. There is nothing worse than thinking you are receiving a huge refund, only to get an audit in the mail instead!
Wednesday, August 20, 2008
Beware the $7,500 'tax credit'
“Washington policy makers and housing industry insiders hope a new tax credit for first-time home buyers will get the moribund housing market moving again.
But most analysts agree that the program is more of a band-aid than a cure-all for the battered real estate market. What's more, others are quick to point out that the credit must be repaid, which means it's actually an interest-free loan that could get some homeowners in trouble.
‘It's one of those things that are more complicated than it seems at first blush,’ said Allen Fishbein, director of housing and credit policy for the Consumer Federation of America. ‘Consumers have to make sure they understand the credit thoroughly.’
The $7,500 credit is for people buying their first homes, and was passed as part of the Housing and Economic Recovery Act of 2008 and signed into law in July. To qualify for the full $7,500, individuals must earn less than $75,000 annually, while couples may earn up to $150,000. Individual buyers with income of up to $95,000 and couples with income up to $170,000 are eligible for a partial credit.
The Senate Finance Committee estimates that about 1.6 million people will use the credit.
The housing industry pushed for the program. "Breaking the log jam of unsold homes is something we are very much behind," said Richard Dugas, president of builder Pulte Homes, at a news conference to discuss the program. First time homebuyers represented about 20% of the market for new homes in 2007.
Realtors are also behind the credit. ‘[It] will help chip away at inventory levels, stabilize prices and spur [sales] activity,’ said Richard A. Smith, CEO of Realogy, the parent company of both Coldwell Banker and Century 21.
The industry has had success with tax credits in the past. In 1975, Congress passed a $2,000 credit for homebuyers (about $8,200 in today's dollars).
‘Buyers flocked to market and cleared out a then-record inventory of homes,’ said NAHB president Sandy Dunn. But that credit did not have to be repaid.
And the impact should extend beyond first time homebuyers, according to Lawrence Yun, chief economist for the National Association of Realtors. A boost in demand for starter homes means that those sellers will be able to trade up to bigger, more expensive places, and so on up the chain.”
Continued at Money.CNN.com
But most analysts agree that the program is more of a band-aid than a cure-all for the battered real estate market. What's more, others are quick to point out that the credit must be repaid, which means it's actually an interest-free loan that could get some homeowners in trouble.
‘It's one of those things that are more complicated than it seems at first blush,’ said Allen Fishbein, director of housing and credit policy for the Consumer Federation of America. ‘Consumers have to make sure they understand the credit thoroughly.’
The $7,500 credit is for people buying their first homes, and was passed as part of the Housing and Economic Recovery Act of 2008 and signed into law in July. To qualify for the full $7,500, individuals must earn less than $75,000 annually, while couples may earn up to $150,000. Individual buyers with income of up to $95,000 and couples with income up to $170,000 are eligible for a partial credit.
The Senate Finance Committee estimates that about 1.6 million people will use the credit.
The housing industry pushed for the program. "Breaking the log jam of unsold homes is something we are very much behind," said Richard Dugas, president of builder Pulte Homes, at a news conference to discuss the program. First time homebuyers represented about 20% of the market for new homes in 2007.
Realtors are also behind the credit. ‘[It] will help chip away at inventory levels, stabilize prices and spur [sales] activity,’ said Richard A. Smith, CEO of Realogy, the parent company of both Coldwell Banker and Century 21.
The industry has had success with tax credits in the past. In 1975, Congress passed a $2,000 credit for homebuyers (about $8,200 in today's dollars).
‘Buyers flocked to market and cleared out a then-record inventory of homes,’ said NAHB president Sandy Dunn. But that credit did not have to be repaid.
And the impact should extend beyond first time homebuyers, according to Lawrence Yun, chief economist for the National Association of Realtors. A boost in demand for starter homes means that those sellers will be able to trade up to bigger, more expensive places, and so on up the chain.”
Continued at Money.CNN.com
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