Real Estate Tax Benefits

Do You Know Your California and Local County/City Tax Benefits?

Having a higher mortgage can be a huge tax benefit and one of the major benefits associated with real estate ownership. When you are purchasing a new home, it is important to understand the tax ramifications associated with it. The California property tax is approximately 1.25% of the sale price of your new property. This may vary according to the local bonded indebtedness in your area. You will also have a one-time supplemental property tax based on when escrow closed and the sale amount. This amount may be calculated on the Los Angeles County Tax Assessor's site.

Each area may have additional real estate related taxes, such as a Mello-Roos tax often found in Orange County. Consult with the website of the county of interest to find out more about additional taxes.

Property Tax Reduction

Another tax benefit is reduction in your property taxes if your principal residence property's tax base value has fallen from the current assessed value. For instance, if you believe the current market value has dropped below what you paid for the property, you should investigate your eligibility for the tax reduction.  Just go to the Los Angeles County Tax Assessor's site, or to your local county's site, to find the application and requirements for this reduction.

If you would like help for finding the comparable properties for this form--you will be required to provide comparables with your application--I will be happy to help you. Just call or e-mail me.

Mills Tax Act

For qualified properties in historic districts, the Mills Tax Act may apply.  Although it is mostly a focus for residential properties, smaller one and two story commercial historic buildings may apply.   An interested party should contact the City for the procedures and information - As of 2015, the Mills Tax Act has been reinstated in Long Beach; there are limits on the number of new properties accepted annually. For properties which have already obtained this benefit, the benefit would pass to the new owner until the expiration of the current application (a period of years). An interest buyer should check the current status of this program with the City.

California Props 60, 90 and 110

To see if you qualify for these benefits for the over-55 age group, please go to the State Board of Equalization site for more specific information. Transferring your base value may apply, if you meet the requirements, in Los Angeles, Alameda, Orange, San Diego, Santa Clara, Ventura,  and San Mateo (as of Nov. 2010). This list changes depending on decisions to participate made in each County at various times.

Home Improvement Tax Credits

Find more information on tax credits for numerous types of home improvements and changes.

Capital Gains Benefits

See this article for capital gains, important especially for investment properties.  The individual is advised to seek their own tax counsel for the effect of capital gains on a transaction.

http://finance.zacks.com/calculate-capital-gains-sale-investment-property-mortgage-owed-9381.html

Information on capital gains for selling your home:  
https://www.irs.gov/taxtopics/tc701.htmlhttps://turbotax.intuit.com/tax-tools/tax-tips/Home-Ownership/Tax-Aspects-of-Home-Ownership--Selling-a-Home/INF12035.html
 
 

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Are you wanting more information about what is your next step? Or you need the advice of a professional resource regarding tax advice? Please contact me for a no-obligation discussion or for a referral to a tax advisor.