All Forum Posts by: Bette Hochberger

This was just a simple post towards homeowners. I get many clients mentioning property taxes while coming to me, so just thought I would share.Totally agree! (:

Prospective homeowners, consider property taxes when budgeting for your home. They can vary widely and significantly impact the overall cost of homeownership. When calculating what you can afford, factor in these taxes to avoid surprises. Sometimes, a more expensive home with lower property taxes can be more affordable than a cheaper home in a high-tax area.

Commercial property owners, real estate taxes can be a tricky terrain. The assessment process for commercial properties often involves evaluating the property's income-generating potential, which can lead to higher taxes than residential properties. It's vital to understand these assessments and budget accordingly. Sometimes, a tax appeal might be necessary if the assessment seems off-base.

When investing in real estate, don't overlook local and state taxes. These can significantly affect your ROI. High property taxes might be offset by better rental rates, or vice versa. Research the tax landscape before investing. For example, states like Texas have no income tax but higher property taxes, which can impact your strategy. Understanding this balance is crucial for a savvy investment decision.

Investors, have you considered a 1031 exchange? It's a strategy allowing you to defer capital gains tax when you sell a property and reinvest the proceeds into another 'like-kind' property. The key here is timing – you have 45 days to identify a replacement property and 180 days to complete the purchase. It's a fantastic way to grow your portfolio while deferring taxes, but it requires careful planning and adherence to IRS rules. 

Did you know about various tax credits available for real estate? These can range from credits for installing energy-efficient systems to rehabilitating historic properties. Each credit has specific qualifications and benefits, so it's worth exploring which ones you might be eligible for. These can reduce your tax bill directly, dollar for dollar, making them an attractive opportunity!

Rental property owners, did you know you can deduct expenses like mortgage interest, property tax, operating expenses, depreciation, and repairs? These deductions can significantly reduce your taxable income. Keep meticulous records and understand what's deductible and what's not. For instance, improvements are not immediately deductible; instead, they're depreciated over time. Navigating these deductions can be complex, but it's worth it for the tax benefits!

Today, let's discuss property tax assessments. These assessments determine how much you pay in property taxes, and they're based on the perceived value of your property. Factors like your home's size, location, and any improvements made play a role. Surprisingly, these assessments can sometimes be inaccurate. If you feel your assessment is too high, you have the right to contest it. Start by reviewing your property's assessment record for any errors and then compare it with similar properties in your area. Remember, understanding your bill can save you money!

Selling a property? Let's talk about Capital Gains Tax. This is the tax on the profit from the sale of your property. The good news is, if it's your primary residence and you've lived there for at least 2 of the last 5 years, you might be exempt from this tax up to a certain limit. For investment properties, though, it's a different story. Planning, such as selling in a year with lower overall income or using a 1031 exchange, can help minimize this tax. Always consult a tax advisor for personalized advice.

Selling a property? Let's talk about Capital Gains Tax. This is the tax on the profit from the sale of your property. The good news is, if it's your primary residence and you've lived there for at least 2 of the last 5 years, you might be exempt from this tax up to a certain limit. For investment properties, though, it's a different story. Planning, such as selling in a year with lower overall income or using a 1031 exchange, can help minimize this tax. Always consult a tax advisor for personalized advice.