Florida Homes and Properties » Finance

Paying off your debts

admin — Wed, 14 Dec 2011 03:45:26 +0000

Do you believe that a penny saved is a penny earned? I don’t and here is why, A penny saved is a penny that you already earned but a penny earned is an additional penny. If you have 1 penny, and save it, you have 1 penny, if you earn a penny, you then have 2 pennies. If you spend a penny when you only start with 1, then you ultimately have none left. So often is the case with debt issues. Sometimes saving isn’t enough when it comes to your finances. Sometimes you need to actually earn more in order to get yourself out a debt problem. Debt Consolidation, while it will not help you to earn extra money can do second best and help you to save the pennies you already have. In order to actually earn more, you will have to work an extra job, but the combination of earning more and saving more can really add up. While we don’t always have the option of earning more money due to other pressing issues in our lives, we can learn to live with less and thus be able to at least save the money we currently have. So if you are looking for a way to pay off bills, it is best to start seeing where you can save money and put that money towards paying off your debts. Doing so will help you become more financially secure.

What You Can Do to Raise Credit Score

admin — Sun, 30 Oct 2011 15:40:19 +0000

?So, do you want to get reviewed in applying money loan from any money lenders and creditors in better way? The answer will bet the credit repair company. The main function of such company is to increase our credit score for the creditors by cleaning up and fixing bad records and errors in our credit history. A site such as Creditrepair-companies.com can be the place where you can acquire the information related to such company.

Yet, we must also understand how to raise credit score of ours as well. The first thing that we can do is getting any copy of our credit records to make sure that there is no mistake in the records. It is because the small error in our record can significantly affect the score of our credit that can reduce our limitation amount in getting our borrowed money from creditors and money lenders. Then, some people say that getting off from any debts that we have is the core in getting increase in our credit score.

Credit cards can be helpful and dangerous as well. Avoiding using the credit card to much will help you increasing your credit record. If you are lack of information about such tips in raising credit score, just visit Creditrepair-companies.com to get any information that you need.

Florida Real Estate and Property Tax Cuts

admin — Wed, 30 Dec 2009 11:25:26 +0000

One of the reasons that the Florida real estate market has been sluggish over the past couple of years has been the result of property taxes in the state. Over the course of the past decade, Florida in fact had one of the higher property tax rates in all of the United States. Efforts are now underway to reign in the costs associated with property tax in Florida at this point in time. By dealing with property tax issues, the goal is to reinvigorate the Florida real estate marketplace.

Many real estate experts have maintained that residential real estate has languished on the market in part due to the fact that real estate tax rates have been considered to be high. Some individuals simply balked at making the purchase of a residence because they did not feel that they could effectively and comfortably manage the property tax assessments that they would be hit with when making the purchase of a home.

Historically, the new owner of a residence was saddled with the purchase price as the basis for the property tax computation. Therefore, this provided a buyer with an added motivation to really bargain for a purchase price that might even end up being below the appropriate market rate.

In Tampa recently the promotion of a new constitutional amendment proposal involving property valuation, property taxes and home purchases took place in the home of Tampa resident who has had a property on the market for an extended period of time. This resident had come to learn that one of the reasons her property was slow in selling rested in the fact that many potential buyers simply did not feel that they could effectively or appropriately manage the property tax that would be assessed against the property based on the asking sales price for the home.

If the new proposed amendment becomes a part of the Florida constitution, the valuation for tax purposes of residential real estate would “reset” at the actual, lower market value immediately after the sale. Therefore, the new property owner would not be “stuck” with the higher property valuation assessment that otherwise does occur in the absence of this amendment.

Beyond this amendment proposal there is also a proposal that would allow for a super-exemption on homestead property. This super-exemption actually would work to exclude a higher percentage of the home’s overall value or worth from property tax liability. This mechanism will work to significantly lower a homeowner’s tax liability in many instances. A homeowner would have the ability to select one or another of these two tax liability reduction plans, but not both. A homeowner will be able to determine which scheme makes sense under his or her particular set of circumstances.

The bottom line is that Florida governmental leaders are attempting to take useful and meaningful steps to bring down the costs associated with property ownership in the state. The goal is to stabilize the market sooner rather than later.

Canadian Tax Write Offs From Real Estate – Part 1

admin — Mon, 19 Oct 2009 04:11:19 +0000

If you are paying taxes, it means you are making money. If you are paying a lot of taxes, then it stands to reason that you are making a lot of money. However much you make, it doesn’t make it any less painful to pass it along to the government though. Unfortunately I haven’t been faced with the problem of paying a big bundle of tax to the government (but I am hoping I have that problem really soon!!), but I have been through enough in the last seven years to give you a few pointers on some ways to minimize taxes surrounding the sale of your real estate investments.

As a real estate investor, you will pay tax on the rental income you earn on the property as well as on any capital gains when you sell. The amount of tax you pay on rental income can be reduced dramatically by expenses such as maintenance, property management, capital cost allowance (depreciation), interest on your mortgage (but not the principal pay down), and other money spent to run your property. In Part 2 of this article series, we’ll address some of these write offs. For this edition, let’s focus in on the second major area you will pay tax on, and that is on Capital Gains when you sell your investment.

A Capital Gain occurs when you sell your property for more than you paid for it. You do not realize your capital gains until you sell.

To calculate your capital gain take the:

Money from the sale of your property

SUBTRACT

Costs of disposition (real estate agent fees, lawyers etc.)

SUBTRACT

What you paid for the property.

You will owe tax on 50% of the amount from the above calculation if the resulting number is positive (a capital gain). This amount gets added (or subtracted if it’s a net loss) to your personal income and you are taxed accordingly.

If the property you are selling is your principal residence, then it is exempt from tax. According to Canada Revenue Agency, a property qualifies as your principal residence if in that year of filing:

* you acquire only to get the right to inhabit

* you own the property alone or jointly with another person

* you, your current or former spouse or common-law partner, or any of your children lived in it at some time during the year

* and, you designate the property as your principal residence.

Now, what if you live in the home for a few years, and then move out and rent it out for a few years as I did with the condo that I owned in Toronto? In that situation, the answer for me was that the condo could still be considered my principal residence for four years after I changed it’s use. The catch is that I could not claim capital cost allowance on the condo, nor could I claim any other property as my principal residence at the same time. For me, this choice was easy because I moved into a property Dave and I already owned and had been treating as a rental property from the accounting sense of things. It was easier to keep the condo as my primary residence and continue to treat my new “home” as a rental property for accounting purposes. It’s important to note that you and your significant other (including common law or same sex partner) cannot own two principal residences at the same time for tax purposes. You must choose one during the over-lapping period.

It’s complicated and that is why both my husband Dave and I have accountants that we consult with on a regular basis to get the best advice.

Explanations About Homestead And Other Florida Tax Exemptions

admin — Sun, 23 Aug 2009 01:10:40 +0000

On January 29, 2008, a constitutional amendment was approved by Florida voters.

Our opinion on this tax reform is not very positive, even though we estimate that it could give a small “shot in the arm” to the depressed Florida real estate. Additional and more substantial reforms must be considered by the legislature if we want our whole tax system to be more equitable and fair, and alleviate the problems of our vanishing middle class.

Some important changed substantially the structure of the homestead and “save-our-home” exemptions. Here is where we stand now:

Homestead exemption. For Florida residents who have filed for this exemption.

- $ 25,000 basic exemption

- Additional $ 25,000 for all homes assessed at $ 75,000 or more. This additional exemption does not apply on the school portion of the tax bill. (about 36%)

- Additional $ 25,000 Senior Citizen exemption. Must be at least 65 years old, and their total household income does not exceed $ 24,214 (amount yearly adjusted for inflation)

This exemption must be renewed annually, including IRS tax return or proof of non-filing.

- Additional $ 500 Widow/widower exemption. Not eligible if remarried.

- Additional $ 500 Disability/Blindness exemption.

- Additional $ 5,000 Veteran Disability exemption. Higher if combat disabled veteran.

- Full Exemption for Veteran service-connected total and permanent disability.

- Full Exemption for totally and permanently disabled persons. Subject to yearly income not exceeding $ 23,604 (adjustable for inflation)

- “Grammy Flat” exemption. When building additions to provide living quarters for parents or grandparents, exemption for the amount of the new construction, up to 20% of the homestead value.

Business Equipment Exemption – $ 25,000. Currently all businesses are subject to an annual tax on tangible property. Small businesses with less than $ 25,000 in tangible property, are not required to file anymore tangible property tax returns.

Save-our-homes

This amendment, approved in 1992 limits the increase of assessed values of homesteaded homes to 3% per year.

Portability of Save-our-homes.

Homesteaded owners can move this benefit from one homesteaded home to another, up to $ 500,000. To be eligible, the new property should be purchased within two years of abandoning the Homestead of the previous home. This portability can be used an unlimited amount of times. One way to calculate this is to calculate 85% of the new home purchase price, then divide that number by the 2007 “just value” of your current home. Multiply that amount by your present “save-our-homes value and the final result will be your estimated new Save our Home value. (this is only an approximate calculation). Another way to explain is: The difference between the “just value” of your home and the “save-our-home” assessed value can be transferred as a reduction to your new home assessed value, up to $ 500,000. We anticipate some confusion to be clarified by Florida Department of Revenue advisory opinions.

All other properties that do not have the homestead protection, such as commercial real estate, rental properties, second homes, investment properties have a new protection. Their taxable value cannot increase more than 10% per year. This cap does not apply to the school portion of the tax bill.

One More Florida Property Tax Reform Proposal!

admin — Sat, 13 Jun 2009 08:55:30 +0000

The last addition to the collection of tax reform propositions is pending review from the Taxation and Budget Reform Commission. It would repeal most of school property taxes, replacing them with the inclusion in the state sales tax of SERVICES that are mostly exempt at the present time.

In 1987, the taxation of services lasted for only a few months and was repealed by the Florida legislature under strong opposition by business interests.

The proposal was sponsored by Commissioner John McKay, a former Florida Senator. It came immediately under attack by business interests who claim that it would mainly affect small business and cause the losses of thousands of jobs. They claim that very few states levy taxes on services; service business could be easily transferred to neighboring states. The Coalition for to Protect Florida’s Economy (which is said to represent more than 200,000 employers) is strongly opposing the proposition.

The proposal would allegedly cut total property taxes by about 40% and has received some approval by different groups who claim that it would be of great relief for businesses who now pay a disproportionate share of property taxes.

It would apparently target areas that are now exempt, such as legal fees, accounting, printing, transportation, automobile repairs, while retaining the non-taxation of food, medicine, electricity and some essential services.

This new proposal is aimed at correcting the shortcomings of the now legislature- approved tax reform that will go on the ballot on January 2008, which do not provide major relief to owners of non-homestead properties, as well as business and investment properties owners.

My opinion: Reduce taxes, reduce taxes, reduce taxes . Not by swapping creativity, not by increasing one tax to reduce the next one, not by ignoring the main issue. Which is: Reduce expenses, reduce expenses, reduce expenses.

Our bubbling bureaucracy, our absurd multiplication of services, our unreachable goals of pensions and benefits for the ever-increasing class of public employees is the real issue and the real problem to be solved.

Our teachers are the lowest paid in the US, but most of the proposals to reduce property taxes will further compromise schools budget.

However, we still have a ridiculous amount of small cities with their own water departments, fire departments, mayors, commissioners, parties, cultural departments, and so forth. And the prospect of pension plans for this whole new class is an ominous threat on our future.

Is this an economical way to spend our money? Citizens’ consensus is NO.
Magic cannot be performed without real reforms. Our public service expenses have not created a better school system (Florida has one of the worst in the whole country), has not improved citizens’ quality of life. It has just gobbled the billions of dollars of property over-taxing and will not give up a penny without a bitter fight. As an example: Some cities have compensated some of their mandated taxes roll-back by charging for previously free services. Did anybody notice?

Is anybody going to put together a proposal that addresses the real causes of the problem, not its consequences?

Florida Property Tax Reform

admin — Fri, 19 Sep 2008 23:04:34 +0000

There is a lot going on in Florida right now concerning the issue of property taxes. Recently a new property tax bill was proposed and has been received with mixed emotions by Florida residents. Some think that this new bill looks great and indeed for some it will be quite nice, however, some sectors believe that the bill is not broad enough to solve some of the past inequalities in the home tax system. The current system which is known as “The Save Our Homes Amendment” states that a property’s assessed value cannot rise more than 3% a year however that does not apply to new construction homes.

Here is how the newly proposed plan breaks down:

On your primary residence, there will be a 75% exemption on the first $200,000 of assessed value and an additional 15% exemption on the next $300,000 in assessed value. So if your home has an assessed value of $500,000, you would receive a $150,000 exemption on the first $200,000 in value, and an exemption of $45,000 for the next $300,000 in value, resulting in a total exemption of $195,000, the maximum benefit under the new plan. Homes valued at $50,000 or less are completely exempt and if you qualify as a low-income senior you’re completely exempt up to $100,000.

This proposed bill is expecting some level of opposition from sectors such as Police, Firefighters and Teachers as it appears that there are some budget cuts that are part and parcel of this tax bill. There is also concern that this bill may not correct the inequalities that were mentioned earlier in this article. As an example: a home purchased 10 years ago pays approximately $5,000 in property tax while a new home in the same area with the new tax system is looking at paying around $7,000, thereby putting a disproportionate amount of tax responsibility on new Florida residents and home owners. The owners that this will affect most significantly are those who own homes in the $200k to $300k range. However as Florida is a popular place the average price of new homes is reaching towards $400k and up. The reality is that this bill will make it more difficult for home owners to trade up to a new residence as the increased tax bill will add thousands to their yearly expenses. Now, this bill has not passed yet, but it could drastically affect the state of home buying and sales in the state of Florida.

Property Taxes and Veterans

admin — Thu, 28 Aug 2008 10:10:30 +0000

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.

Non-Payment of Property Taxes – Consequences to be Faced

admin — Sun, 03 Aug 2008 21:40:13 +0000

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.

How Property Taxes Are Calculated On A Home

admin — Tue, 23 Oct 2007 06:04:23 +0000

Real estate properties in the U.S. are taxed by the federal and state governments. Taxes on these properties are a major source of revenue for local governments. Property tax rates, in the form of percentage, are usually decided by city councils, school boards, town boards, village boards and county legislatures and are collected each year by municipalities such as cities, counties and districts. Every year normally during September or October, the board conducts budget hearings to find out how much funds they will need for their operations the following year. The tax rate is then determined by dividing the board’s total taxes by the total assessed value of the jurisdiction.

Property taxes have a special purpose. The funds collected from taxpayers
are used by municipalities to improve vital public facilities and infrastructure such as schools, sewers, libraries, fire stations, hospitals, parks, roads and bridges.

Laws on the various aspects of real estate properties as well as forms of property tax vary from state to state. However, there’s a standard formula in calculating property taxes on a home. The normal process involves multiplying the assessed value of a certain property by the prevailing tax rate. Exemptions, if any, are then deducted from the resulting figure. Currently, some 40 states give property tax credits or homestead exemptions that allow a property to have a lower taxable assessed value.

In some states, the property tax rate is known as a millage tax, millage rate or mill levy with one mill equivalent to 1/1,000 of a dollar. Simply put, an owner of a property will have to pay one dollar for every $1,000 in taxable value.

The assessed value of a property is vital in determining the property tax. It is here where the assessor comes in and not in calculating the property tax as some other people might believe. To get the assessed value, the assessor estimates the market value of a property or the price it would likely sell for in the real estate market. This is done by conducting studies and analysis of the local real estate market and taking into consideration new construction, improvements done to the property and demolition of structures.

On your own as a homeowner, you should get an idea of your home’s market value based on the sale prices of comparable properties in your neighborhood. If in the event you find that your assessment is a bit high, there is still a chance to have the value reduced through administrative and judicial proceedings or by consultation with your local assessor.

In coming up with the assessed value for residential properties, the actual value is multiplied by the residential assessment rate. The residential assessment rate is usually set by the state thus, it differs in every state.
So for example, the actual value of a home is $120,000 and the assessment rate is 7 percent, the assessed value would be $8,400.

Meanwhile, in getting the property tax for the same home valued at $120,000 with a tax rate of say, 25 percent, multiply the assessed value with the tax rate ($8,400 x .025) and you’ll have a property tax bill of $2,100.

Keep in mind that property taxes have to paid each year and failure to do so would mean penalties. If possible, learn more about this important tax and other related programs such as tax breaks and tax reliefs that could provide you and your family reduced taxes.