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. The City of Long Beach has participated in this program but may not be currently taking new applications. An interested party should contact the City for the current status. For properties which have already obtained this benefit, the benefit would pass to the new owner until the expiration of the current applciation (a period of years).
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 2011 changes to capital gains, important especially for investment properties:
longbeachrealestate.blogspot.com/2010/04/capital-gains-tax-going-up-in-2011.html
