Florida Homes and Properties

Archive for August, 2008

Without question the Limited Liability Company has become the most popular business form for small and growing business throughout the United States. Because of its tax benefits, flexibility, lack or required formalities, and personal legal liability protection from business debts and liabilities, it has surpassed the Corporation as the entity of choice. Whether you are starting a new business or growing a current business choosing an LLC over an Inc. is an obvious choice. Something else to consider is location. We have all heard the ads to “set up your Nevada Corporation”. Have you ever wondered what that is all about? What makes Nevada such a popular place to Incorporate? Well, the laws in Nevada are set up to allow the corporation to hide the shareholder information. Add to that the fact that Nevada does not have a State income tax, and the answer to the Nevada conundrum is easy. Privacy and tax savings. Wow that was easy.

But wait, this article began by discussing the fact that the creation of LLC’s is greatly outpacing the creation of new Corporations. What can the discussing of LLC’s popularity and the discussion of the fact that Nevada has historically been the most popular place to for a corporation possibly have in common? The answer is Privacy. Whether or not a state allows a corporation to hide shareholder information is completely irrelevant to the creation of and LLC-THERE ARE NO SHAREHOLDERS IN AN LLC—ONLY MEMBERS. And guess what, in most states you do not have to identify the members to create a valid LLC. Hence, in every state, LLCs offer the same privacy as a Nevada Corporation. Okay fine, but what about tax savings? If the company is created in a state with no state income tax, such as Florida, then the Florida LLC will give you all of the benefits of the notorious Nevada Corporation, plus give you more flexibility and fewer “corporate formalities” than a traditional Corporation.

Imagine this: Your Florida LLC owns rental property in Georgia. You have a buyer for the property. If you sell the property you will pay federal and Georgia state tax on the gain. If, however, you sell the Florida LLC to the buyer, you will only be subject to the Federal tax. The interest in the LLC is considered personal property located in Florida, so Georgia can not impute a tax. This, along with spreading risks is why savvy real estate investors will often create a separate LLC for each investment property they own.

If your business is not in Florida, you can still have a Florida LLC created for your business, you may have to register the LLC in the state of your business operations as a Foreign Company. However, if the only business of the LLC is that it owns investment property, it may not be required to register the company in your home State. A document processing company creating LLCs and Incs from a software program will not be able to help you understand the requirements and restrictions, and are not allowed to give you legal advice. You will want to have your LLC created by an experienced law firm.

Every homeowner has a responsibility to pay property taxes. They are based upon the assessed value of your home, not its appraised value. Assessed and appraised values are two different things. The appraised value of your home represents the price you might get if you put your home up for sale in today’s market. The assessed value of your home represents its value as applicable to taxation.

Most states use mils to measure the property tax. A mil is equal to $1 for every $1000 when comparing a home’s assessed value to its appraised value. Therefore, if you own a house worth $100,000 and your property is taxed at 3.5 mils, you owe $3.50 for every $1000 of value in your home. By this equation, your property tax would be $350. Some mortgage lenders escrow for these taxes on a per month basis. If you are not escrowing yours through a lender, your local government will bill you quarterly for your assessed property tax.

There is a property tax relief available to veterans in most areas. Not all municipalities participate in this relief. You would have to contact your local municipality to determine if such relief is available for veterans where you reside.

Property tax relief can be obtained in many ways, such as exemptions, frozen assessment rates, abatement, refunds, or direct rebates on property tax. New York has several different types of property tax relief available for veterans. A veteran in South Carolina will get an exemption against the first $50,000 of their home’s assessment value. A disabled vet in Maryland receives total exemption from paying any property taxes.

So, if you are a veteran seeking relief on property taxes you should contact your state, your municipality and your local veteran’s group to find out if you might qualify for property tax relief on your home.

The property taxes are the largest bills that are received every year. Property taxes are paid in order to fund the local government for necessary programs such as schools, and for maintaining roads in the locality in which we live in. What if the bills are too high and one cannot afford to pay the tax this year?

First thing to be done is to look into the assessor of taxes’ valuation of the home. Whatever is determined by the assessor of taxes will have to be paid as property tax. However if you think that your home has been valued more than the required amount, you can make an appeal to reconsider the valuation. If the appeal is in your favor then you will need to pay only the lower and newer valuation for your home. This will bring down your tax bills greatly.

Next, see to that if there are exemptions you are not taking. In many places, there is a homestead exemption that can be taken on your primary home. This will definitely reduce your bills. However if you own more that one property, then you will be able to take the homestead exemption only on you main residence. This homestead exemption can be taken at the local tax office if they are permitted. There is also a hardship exemption but it is offered on a yearly basis.

Also you need to request for a plan of payment for all you properties. Most of the local offices will give you the plan of payment that allows you to pay the taxes over a period of time. In some places, you can pay the taxes in installments until you have completely paid the taxes without needing to make a request for a plan of payment. This can be done to prevent tax foreclosure of your property. Once your property is tax foreclosed then it is not possible for a plan payment to be set up.

If the property taxes are not paid on the due dates it will lead to accrue penalties and interest will start to build up on the unpaid balances even though you have a payment plan. If the taxes are not paid a long period even after the extended time then your property will be tax foreclosed. Different states handle these foreclosures differently. However in all states there is particular point at which the property is seized. Then they sell it off to the local government to in order to pay the delinquent tax. Mostly the government will work with these tax payers to ensure that the properties are not seized.