Something for your radar if you’re thinking about buying or selling in Sunnyvale: 63% of city voters supported a potential property transfer tax in a recent poll. This means the tax could be headed to the November ballot. San José Spotlight has more details.
With pandemic provisions running out, most of us are coping with filing our taxes by April 15 again. Already filed? Congratulations! Here are some tips for the procrastinators in the rest of us.
Even though I prefer to use a tax professional instead of relying on an app, there’s still a lot of paperwork to pull together, and it’s easy for things to get lost. For me, it’s as simple as collecting all of our tax documents as they arrive in a special basket next to the rest of the mail. This way, when April 14th rolls around, I know where to find everything.
Paperwork is so old school. The best part about modern technology is you can procrastinate until the last minute and just send your accountant a zip file. Just don’t sleep on your property tax bill! Second installments in Santa Clara County become delinquent — and subject to hefty fines — after April 10th. Good thing they let you pay online. Learn more here.
Selling your first home and purchasing your next one can seem like an insurmountable process when you’re in the thick of it. That’s why it’s important to plan ahead before the madness begins. The first step is understanding the costs beyond the listing price.
Before you commit to listing your current home, it’s a good idea to ask your agent for an estimate of all the closing costs involved. A roll call of the usual suspects includes real estate commissions, advertising, legal and professional fees, excise taxes, capital gains taxes, prorated property taxes and HOA fees, and typically surveys, inspections, etc. You’ll need to put a number to all of these items to get a full picture of your options for buying a new home, which comes with its own set of peripheral expenses.
So what are some of the costs you need to consider as a buyer? To name just a few: down payment, lending fees, title fees, insurance, inspections (if the seller isn’t paying), professional cleaning, repairs and cosmetic upgrades, utility deposits, and more. We also suggest getting pre-approved for a new home loan before you do anything else, and while you’re at it, make sure to include the costs for any renovations you may want to make. Oh, and did we mention moving expenses? It adds up quick!
One of our clients sold his house with us and moved to a new home in Palm Springs to enjoy his retirement. We were happy to be a part of his journey in a new place. One part of that journey was understanding how changes to property tax laws thanks to Proposition 19 could benefit him in his move.
With Prop 19, California homeowners can transfer the tax base of their current residence to a new residence anywhere in the state. Could you benefit from Prop 19? Visit prop19taxbreak.com for up-to-date information. One helpful feature is the graphic above that explains how the new law works whether you’re scaling down or scaling up.
It’s a good idea before you move anywhere to check the County Assessor's website where you’re planning to land so you know what to expect from property assessments and taxes. If you can take advantage of Prop 19 regulations, be sure to download this sample form. And of course, you can always ask us for tips. We’re here to help!
It may seem like a long, uphill climb now, but I guarantee that nobody who bought their first home 10 years ago regrets the decision, no matter what they had to pay. That’s mainly due to the appreciation of the home’s value, but it’s also about the tax benefits. For one thing, you’re living in the home rent-free, and you’re not being taxed on income from renting the property. You can also deduct mortgage interest and property tax payments, as well as certain other expenses from your federal taxable income, as long as you take the time to itemize your deductions. Additionally, you can exclude capital gains you get from the eventual sale of the home – up to a limit, of course!
True, the benefits of homeownership outweigh any of the negatives, but it’s important to note that homeowner tax deductions and exclusions are worth more for folks in higher tax brackets than to those in lower brackets. For example, according to the Tax Policy Center, deducting $2,000 for paid property taxes saves someone in the top tax bracket about $740, but it only saves a taxpayer in the standard bracket $440. And despite representing only 26% percent of all taxpayers, folks with incomes of $100,000 or more get 90% percent of the tax benefits from the mortgage interest deduction. That’s because they’re likely paying more and itemizing their returns.
