Are You Voting on California Ballot? You Should.

If you are not registered to vote, please do so now so you can vote in the upcoming election.  

Did you know:

California is highest in state income tax - over 13%. (some states have no state income tax)

California is highest in sales tax - 7.25%, plus local city taxes on top of that.

California property tax - 19th out of all states.

Propositions affecting our property, aren't we paying enough taxes already?:

Proposition 5 - Allows local government to request bonds for affordable housing and public structure with only a 55% approval, down from 66.66% current requirement. Will raise our property taxes - vote NO.  

Proposition 33 - Expands local government authority to enact rent control on residential property. This is the 3rd attempt by Michael Weinstein and his multi-million dollar special interest group, AIDS Healthcare.  It will revoke the Costa-Hawkins Act which exempts single family homes, townhomes,  condos, the rent can be raised to market level. If Prop. 33 passes, these properties will come under rent control (Current Exemption from rent control: Single-family homes and condominiums, as well as construction after 1995, are exempt from rent control.)  Vacancy decontrol will not be allowed if law passed by municipality, this proposition can tell landlord what to charge for a vacant unit, owner may never be able to catch up to the current market rate by being forced to cap rents at lower amounts, thus causing owner to defer maintenance which now costs more than 10-15 years ago when the tenant moved in. Renters may think they will start getting lower rent if this passes, but first, cities have to pass local laws, and each city may be different. In spite of ads that say 33 will fight corporation takeover of rental properties, in actual fact the majority of rental properties in California are owned by small independent owners, i.e., families who inherited or bought years ago. This proposition is already causing private owners to sell their rental houses which are being bought up by new owner occupants, so that much more rental housing is being taken off the market, further decreasing the rental supply.  Vote NO.   Go to https://votenoprop33.com/

Proposition 34 - Health care providers, see previous paragraph, who get discounted federal money for their healthcare programs are turning around and reselling that program for a profit, and then are spending it on their tenant initiatives (see Proposition 5), not on their health care programs.  Vote YES to require discounted federal money profits to be spent on healthcare, not on special interest groups and their political propositions.

You should have received the booklet explaining all ballot propositions, please read it!

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Buying Another Home? Have You Calculated All Potential Monthly Costs?

If you're currently thinking of buying, you're probably think a lot about the current interest rates and your monthly mortgage bill.

But there's more.

It's realistic in the Long Beach area market to consider at least a purchase price of $600,000, so for this post I'll assume the buyer has an approval for this price.  The figure at the right assumes a  down payment of 20% and a loan term of 30 years, interest rate at 3.16%.  As shown, the monthly principal and interest is $2065.35 every month.  

Since this buyer is putting down 20%, the lender usually allows property taxes to be paid directly by the homeowner, not paid into an escrow account.  

Closing costs and the expenditures associated with moving into a new property are not included in these amounts, but buyers must at least consider the total cost of closing escrow. Your lender will be including that in estimates so they should not be a surprise.

So looking at other costs associated with being a homeowner, which the buyer should pay attention to before signing a contract with a seller, there are property taxes, home insurance, and "other costs".  It's the "other costs" that often the homeowner does not calculate directly, or even deal with until it's time to leave the home.  That can often lead to what's known as deferred maintenance, something to be avoided. Because as the deferred maintenance piles up, it leads to faster deterioration.

At least 1% of home's value should be included on an annual basis for such things as roof repair, termite or pest control, paint or stucco repair, fence repair, garage door servicing, to name a few.  If the home predates 1932, foundation or retrofit may come up (home before then were not required to be bolted to the foundation). 

Although used in this scenario, a 20% down payment is not required to buy a home, FHA loans only require 3.5% down payment.

To discover different scenarios, go to the Calculator link for all types of calculations, not just real estate, and read the notes below--they are very informative.  The Consumer Financial Protection Bureau is also a useful source to consult.

For more information about buying a home, please contact me.  I have over 25 years of experience helping clients make home decisions.

 

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Are You Taking All Your Tax Deductions?

It's never too early to review what the tax advantages are for you as a homeowner or a future homeowner.

Homeownership comes with many benefits, including some sizeable tax deductions.

For more specific information, ask your accountant or tax professional about whether these deductions apply to you. Also, more information is available in the many publication published on the IRS and California FTB web sites.

Deductions

• Mortgage interest – You may be able to deduct all interest paid on your mortgage.
• Mortgage insurance – Mortgage insurance on government-backed mortgages may be deductible in the same way as mortgage interest.
• Local property tax – You may deduct property taxes paid to the county tax collector.
• Points & prepaid interest – Points and charges paid to obtain a mortgage for a home purchase or improvements may be deductible.
• Home office deduction – The portion of your home used exclusively and regularly as an office space is deductible from your taxable income.
• Green energy tax credit – Installation of renewable energy systems may be eligible for deductions up to 30%.
• Moving expenses – If you moved more than 50 miles for a job opportunity, you may be eligible for moving deductions.
• Renovation/demolition salvage – If you donated construction materials or demolition waste to a qualified charity, you may deduct the value of the donated materials.
• Improvements added to basis – Qualifying improvements added to your cost basis may reduce your capital gains tax owed if you later sell your home.
• Withholding credit for investors – If you purchased or sold an income property and 3.33% was withheld, check out the Franchise Tax Board’s withholding criteria to ensure you receive credits.

Looking to buy or sell your home? Call me today or go to my website at www.juliahuntsman.com.

The California Legislature Considers Tax on Homeowners

 

The state legislature has been considering a tax that would be imposed on homeowners who need to record certain documents with their counties. This $75 per document tax will be imposed on a variety of documents, which will include, for example, documents related to refinancing properties, taking properties in and out of trusts, making lot line adjustments, obtaining constructions loans and upon the death of a spouse.

The tax also applies to foreclosures (the owner would be responsible, not the lender) and filing mechanics liens. For instance, it’s not untypical in a refinance, for six documents to be subject to the new tax, resulting in a tax total of $552. If a spouse dies, up to five documents need to be recorded, creating a total tax of $440 including existing recording fees.

SB 391 is in the Assembly Appropriations Committee. The CALIFORNIA ASSOCIATION OF REALTORS® is opposing this bill.