$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. In Marin County, to take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.

For more information, call me at 415.302.7787 right away. Cheers!

Governor set to sign bill to benefit first-time home buyers

UPDATE: Today Gov. Schwarzenegger signed into law AB 183, a bill which would provide $200 million for homebuyer tax credits.  Especially helpful for Marin County first-time home buyers who will qualify for the full $10,000 tax credit.

The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to research conducted last year by the California Association of Realtors.

AB 183, passed at the request of the Governor, is designed to help stimulate the economy and create jobs.  It allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, based on a firm contract executed on or before December 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

Not to be confused with the Federal tax credit, which expires April 30 and is limited to purchases under $800,000. Questions? Call me 415.302.7787 right now.

How to Save Big Bucks NOW on Your Marin Property Tax Bill

The Upside of a Down Market

Home process sliding in your neighborhood? Just received a shocking tax bill from the county? Do what many of my clients are doing, and contest the assessed valuation  of your home (as listed on your tax bill) with the Marin Tax Collector.

Reduce Your Tax Now

Property taxes are ad valorum, or based on the assessed market value of your property. The county uses a formula based on your original purchase price and Prop. 13, then bumps your taxes every year. If you can show that homes similar to yours are selling for less than your assessed value, the tax collector will reduce the amount of tax you owe.

You need to send them a completed Request for Informal Review form and a list of similar properties near your home that have sold recently.  Comparable properties need to be like yours in respect to lot size, square footage, and other improvements.

I’ll run the comparable properties for you from the multiple listing service and send them to you without cost or obligation. But contact me right away – 415.300.0432 or jack@mmsmarin.com – because your request must be received by the County no later than December 31 to reduce this year’s tax. So hurry!

Do We Have the Guts to Gut Prop. 13?

Last month, San Francisco Assessor Philip Y. Ting launched a campaign to alter Proposition 13. This is an idea that is long overdue.

Now, before you start to get all red in the face, hear me out. I voted for Prop. 13 thirty-one years ago myself. But I was wrong. The idea of cutting gov’t waste and helping old folks keep their homes was irresistible. What we didn’t notice was that this new law covered not just residences but commercial properties as well. Which means sweet profits for all those businesses on the “right side” of Prop 13, and an uphill battle for all those on the other side. Completely unfair. Worse, the law requires a 2/3 majority of the legislature before any new taxes can be enacted.

State revenues from sales and income taxes have not been enough, especially in this severe recession. California has borrowed to make up the difference, and now we’re $24 billion in debt. Ting wants to “split” the tax roll, and begin to tax commercial property owners based on current valuations.

Essential services are being cut. Now is the time to change prop 13 and make California great again. We can’t afford this “Sacred Cow”. We never really could.