Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts

Dec 10, 2010

Senate Tax Bill Update

President Obama announced a proposed framework for extending tax programs last Monday. The Senate Leaders and Finance Committee just released the text of the bill last night.  Below please find the current summary and an analysis of tax legislative developments: 
  • The Senate plans to take up the legislation beginning next Monday with a vote on a required motion to proceed to the bill (the vote is scheduled for 3pm on Monday).  That vote will be a 60-vote threshold to pass, and will be a good proxy for vote on final passage.  Although most Senators have not yet publicly declared their intentions, the bill is expected to receive 60 votes and for the Senate to pass the bill (final passage) sometime mid-week.
  • The Senate bill follows the outline of the agreement laid out by President Obama earlier this week:
  •  2-year extension of individual income tax rates 
  •  Estate tax for 2011 and 2012 with a 35 percent rate and a $5 million personal exemption (with an election to have no estate tax and carryover basis rules apply for decedents of those dying in 2010) 
  • Restoration of unified credit against gift tax – indicating that the gift tax exemption is  increasing to $5 MM 
  •  Generation Skipping Transfers tax rate of zero for all 2010 GSTs
  •  Temporary employee payroll tax cut
  • Enhanced bonus depreciation and expensing provisions
  • 2-year extension of “tax extenders” (2010 and 2011) 
  • Extension of unemployment insurance for one year 
  • No tax increases or other revenue offsets
  •  As has been widely reported, House Democrats voted yesterday to approve a non-binding resolution rejecting the tax agreement reached by the President and Congressional Republicans.  Although uncertainty remains regarding House action on the package, if the Senate passes the bill as expected, there is a likely chance that the House will ultimately pass it as well before the end of the year.

Feb 10, 2010

Gov Wants to Impose Mortgage Tax on Co-ops

Governor Patterson wants to impose the NY state mortgage recording tax on Coops. Coops have been exempt from the state mortgage tax because coops are not considered "Real Property" they have been considered personal property.

Prior to 1989 coops were exempt from transfer taxes. Until a few years ago coop sales were private and not in the public records.

Financing a coop is technically not a mortgage but a coop loan. Coop owners purchase shares in a corporation that owns the building. Coop shareholders have a proprietary lease.

Current mortgage tax on condos and houses are between 2% and 2.175% depending on the mortgage amount. Below $500,000 or above $500,000. All purchases above $1 million are also subject to a 1% mansion tax.

If this new tax is approved most of the revenue will go to NYC. It may have an adverse effect on the value and sale prices of coops.

If you've been thinking about buying a coop and need financing, Now Is the Time before this new mortgage recording tax for coops is implemented.

Click here to receive Manhattan coop listings by email.

Jan 19, 2010

NYC Property Taxes Will Increase July 1

The Department of Finance released a tentative assessment for all residential and commercial properties for fiscal 2011, which begins July 1st.

While property values may have dropped, according to the city, the total market value of property in NYC, including new construction rose 0.12% to $796 billlion. NYC taxes properties based on assessed value. Assessed value can rise even if market value declines.

Market values for coops and condos rose 4.04% and assessed values increased 5.09%. NYC Coops and condos are valued as if they were rental properties that generate income. Property values lag two years. Fiscal 2011 assessment is based on 2008 data. The Finance department will publish final assessment values on May 25th. The final assessment will be used to calculate property taxes for fiscal year 2011.

For more information:

Nov 2, 2009

Loan Limit and Home Buyer Tax Credit Extended

The House and Senate approved a continuing resolution including a provision to extend current FHA loan limits through next year.

The Senate announced they have agreed to an extension of the $8000 first-time home buyer tax credit through April 30, 2010. The tax credit was set to expire November 30, 2010.

The provision would keep in place current conforming loan limits of $625,000 ($729,750 in Manhattan and designated high-cost areas). Without approval from the Senate, those limits will expire December 31.

Feb 9, 2009

Millionaire Population Drops in NYC

The number of millionaires in New York City is dropping. There are approximately 44,000 millionaires in the city this year, a decrease of nearly 10 percent from last year.

NY state is considering a tax hike for the wealthy. One proposal would raise the state income tax for anyone making $250,000 or more. Other plans suggest increasing taxes for those making between $500,000 to $1 million a year.
Governor David Paterson is opposed to the hikes and has said that higher taxes would only be considered as a last resort. Mayor Bloomberg is opposed to the tax and said it would benefit New Jersey and Connecticut.
According to a new poll from Quinnipiac University New Yorkers would rather have the state cut services than raise taxes at all. Of the people surveyed, 53 percent say services should be cut to balance the state budget. Only 36 percent say taxes should be raised.
Broken down by party, the numbers change, 73 percent of Republicans favoring cutting services, and 48 percent of Democrats preferring tax increases.
Both Republicans and Democrats support raising taxes on people earning more than a million dollars a year, with 84 percent of respondents favoring a "millionaire tax" and 13 percent opposing.
60 percent of those polled disapproved the so-called "fat tax" on non-diet soft drinks, while only 37 percent supported it.
Quinnipiac surveyed 834 registered voters across the state from December 17 to 21. The margin of error is plus or minus 3.4 percentage points.

May 9, 2007

1997 Tax Reform - Great for Real Estate!

The Taxpayer Relief Act of 1997 - signed into law by President Bill Clinton together with the Balanced Budget Act of 1997 is probably the most significant change in recent times affecting real estate. This law made some major improvements for Home Sellers, Property Owners and First Time Home Buyers. It simplified taxes for 99% of Homes sold in the U.S.

Since 1997 Home sellers are eligible to exclude up to $250,000 if single or up to $500,000 if married, of the capital gain on the sale of the residence. In order to be able to claim the entire exclusion, the home seller must have owned and resided in his home for at least two years of the last five years prior to the sale of the residence. If eligible for the inclusion, it may be claimed once every two years.
If the home was sold because of a change in employment, health, or other unforeseen circumstance, the home seller may be eligible to claim a partial exclusion of capital gains even if he or she didn't live in the home for a total of two years of the last five before the sale. The portion of the partial exclusion is calculated based on how long the seller lived in and owned the home. The exclusion relates to the gain only, not the gross sale price. Broker's commission is deducted from the gross sale price as is capital improvements and closing costs.
Prior to the Taxpayer Relief Act of 1997 the tax law allowed rollover that required reinvestment in a home of greater or equal value. The previous law also allowed a one-time capital gain exclusion of $125,000 for taxpayers over age 55 who sold their homes.
This tax reform enabled many to keep much of their wealth that they accumulated from the sale of their homes.
The 1997 tax reform law also allows early withdrawals from Ira's without penalties of up to $10,000 for First Time Home buyers. The law defines first time home buyers as any one who has not owned a home for the past two years. The cap gain tax was also lowered from maximum 28% to maximum 20%.
The Taxpayer Relief Act of 1997 has helped many sellers. Many who did not have to wait until age 55 to get an exclusion and helped fuel the hot real estate market these past 10 years.
This same 1997 Tax Reform law also helped to revitalize distressed urban areas by creating empowerment zones. The creation of urban empowerment zones to promote business development.
All one has to do is walk through Harlem today and it is quite evident that this once distressed part of Manhattan is revitalized. New condos are everywhere. Shells of Brownstones have been converted to new condo Townhouses. Major banks, retail chains, real estate brokerages and hotels have opened and are opening on 125th Street and throughout Harlem. Bill Clinton currently has his office in Harlem.
The City of New York offers many programs to encourage home ownership several of the programs are for first time buyers. Many New Yorkers want to buy a home but don't have enough money saved for their down payment and closing costs.
As part of Mayor Bloomberg's "New Housing Marketplace Plan," the New York City Department of Housing Preservation and Development (HPD) created the HomeFirst Down Payment Assistance program. It provides qualified homebuyers with the greater of 6% of a home's purchase price or $10,000 toward the down payment or closing costs on a 1-4 family home, a condominium, or a cooperative in one of the five boroughs of New York City.

Apr 8, 2007

New Development Resales: A Real Good Deal

If you're looking for new construction you might save thousands of dollars by buying a resale in a brand new building. When a buyer purchases a condo or coop in a new development directly from the sponsor(developer)the buyer is usually required to pay New York City and New York State transfer tax.

When buying from a sponsor in a coop,(unsold shares) the transfer tax is not only the amount of the sale price but the portion of the underlying mortgage allocated to the shares associated with the unit being purchased.

In resales seller's pay transfer taxes. NYC transfer tax is 1.425% of sale price above $500,000.

New buildings usually start selling pre-construction about 2 years before the the building is ready for occupancy and the units close. Often the best lines sell out early. By the time the building opens there are usually a few resales. Either units never lived in purchased by flippers or a unit that might be for sale because of personal reasons.

If you missed out on a building you like during pre-construction sales buying one of the first resales in a new development has some advantages. In addition to not paying transfer taxes and other possible sponsor related closing costs you can have more instant gratification. You get to physically see the apartment, the fixures and the view in person. In pre construction you buy off a floor plan and brochures.You don't always get to see the building or the apartment you are purchasing. You don't have to tie up your 10%-15% deposit for a year or more.

Interested in New construction consider the advantages of a resale. If you would like to receive new construction listings by email including resales click here.

This blog site is designed and published as a consumer service by local real estate broker to help Manhattan, New York City buyers, sellers and renters make informed real estate decisions. This site and its feeds are owned and operated by Mitchell J Hall, a NY State licensed real estate associate broker associated with The Corcoran Group and member of the Real Estate Board of New York.

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