Archive for the 'Taxes' category

I get asked about tax exemptions and tax rates for the Boston area several times a year - naturally, my clients want to know what the rates are and what they will saving if they own their home in certain areas! Here's a quick look at how you are taxed and residential exemptions:

BOSTON:

Boston Residential Real Estate: $12.79 per $1,000 assessed value
Boston Commercial Real Estate: $31.02 per $1,000 assessed value
Residential Exemption (what you are discounted when this is your primary residence): $1,594.85

BROOKLINE:

Residential: $11.30 per $1,000 assessed value
Commercial: $18.30 per $1,000 assessed value
Residential Exemption: $1,837.46

CAMBRIDGE:

Residential: $8.16 per $1,000 assessed value
Commercial: $19.90 per $1,000 assessed value
Residential Exemption: $1,601.00

SOMERVILLE:

Residential: $12.71 per $1,000 assessed value
Commercial: $21.21 per $1,000 assessed value
Residential Exemption: $1,738.02

Here's a link to referencing more info about Residential Tax Exemption in Boston.

To discuss in greater detail, or any Boston real estate questions or real estate search in the Boston area, let me know!

Paul@bostonlofts.com

...and interest rates and housing prices are rising!

The American Dream..."Baseball, Hot Dogs, Apple Pie and..."

Work hard, and have a family.  The government and banks will help you buy a home that's affordable.  Live a good wholesome life, retire and leave your debt-free home to your kids. 

The American Nightmare...

Work hard, and have a family.  Buy a home you may not be able to afford, then have your wages drop or worse - lose your job, and lose your home!  Then realize you will have little or nothing left to give to your kids when you're gone.

The tax law subsidizing home ownership has and does help us have and enjoy the American Dream, the 'Apple Pie'.  Now, some say we've had too much pie, that it costs too much, it 'makes us fat' or worse, it kills us...

Recent propsals to remove ingredients from our Great Americal Apple Pie Recipe would result in loss of a fixed rate mortgage and removal of the IRS tax deduction of mortgage interest and real estate taxes on your primary residence..both are no better than a plain baloney sandwich!

The Obama administration released a proposal this past Friday that would make major changes to the U.S. housing finance system; restructuring it to reduce its dependence on federal subsidies.  Fannie Mae, Freddie Mac, and the Federal Housing Administration currently finance more than 90% of mortgages. 

The plan is to slowly put Fannie and Freddie out of business by gradually reducing the value of the loans they can guarantee and raising the prices they charge lenders. Plans will also require larger down payments from borrowers. The Treasury secretary, Timmothy F. Geithner, has indicated he expects these changes to take 5-7 years to fully implement, stressing that the housing market will dictate how slowly or quickly the agencies close.

So do we have to dream a new dream?  Go on this kind of fiscal diet?  Will we ever eat Great American Apple Pie again? 

Don't worry!  Home ownership has been and should be the engine that helps drives this country.  History has shown that in the long run, property values increase. 

Housing, like many other businesses, is cyclical- and despite the fact that there have been some bad patches,  no one should change this system without either coming up with an alternative plan, or make changes over a long period of time and include some protections for certain situations/owners.  If not, housing will devalue once again, and this time, there will be many who will be "under water" who would not have been of these changes dp come about.  At best they may have to change their lifestyle, be locked into staying in their homes that they cannot afford and worse yet, they could lose their homes.  

We do not want to see people on the street trying to find the Great American "Apple Pie" that is no longer available to any of  us.

Here is more of what may be coming:

New York Time - Shockwaves on the housing market?  

FORTUNE - Earthquake, are we really capable of handling this change to the mortgage industry?

Earlier this year, renowned economist Karl E. Case wrote a summation of the housing crisis and the 'Great Recession' in the form of a poem called, 'Reflections on the Housing Market'.

Dr. Case is the Professor of Economics at Wellesley College, a Founding Partner of the real estate research firm Fiserv Case Shiller Weiss, Inc., and he also co-developed the Case-Shiller Home Price Index, which is the most widely referenced source of housing market prices in the U.S. today.  

Dr. Case was one of the economists that predicted the current collapse of the U.S. housing bubble.  In his poem below, he writes about the early indicators of the troubles to come, the crisis as it unfolded, the effects the collapse is still having today.

He closes the poem by acknowledging that markets will correct themselves in time, no matter what, and calls for politicians to work towards a solution to the problems created by the housing bubble collapse.       

Do you agree with Dr. Case's summation?  What do you think politicians can do to 'help find solutions'?  Share your thoughts in the comment section below.  

Reflections on the Housing Market
By Karl E. Case

"For the last few years, we have shed many tears
Living through a recession.
The economy's broke and it's not a joke,
When we talk of another depression.
Fifteen million without a job,
Foreclosures and banks that fail,
401K's became 201K's,
And everything's up for sale.

How can it be? What didn't we see
That led to all of this trouble?
There is little doubt that the proximal cause
Was a bursting housing bubble.
But other than that, who can we blame?
And what do they lament?
Millions of people contributed to
This hundred-year event."

Read the full poem by Chip Case.

The collapse of the housing bubble really emphasizes the importance of  investing in a home that has intrinsic value to you and to future buyers.  If you need help finding a Boston property you can feel confident in investing in, you can rely on the experience and knowledge of a Boston Realty Advisor to help you find the ideal Boston real estate to meet your needs.

Last night Boston Realty Advisors' CEO David Friedberg, lobbied Congressman Barney Frank for another housing tax credit program based on the success of the First-Time Buyer Tax Credit Programs of 2009!

He also talked about a new Boston property plan for HUD (Housing and Urban Development) similar to those from the early 70's which created housing for the moderate and poor while creating 1,000's of jobs for the Bay State.

 

FHA has recently announced that it is raising the requirements of buyers and the properties they wish to finance. The changes are going to take place when the weather gets a little warmer, so speak to your mortgage planner / broker about how this may affect you.

Here are the major changes:

- FICO / Credit Scores below 580 will require a 10% downpayment. This is 80 points above the current requirement of a 500 credit score.

- Upfront Premiums are increasing from 1.75% to 2.25%

- Seller Contributions will be reduced by half - from a maximum of 6%, now down to 3%!

The good news is first-time homebuyers that qualify will still be sitting pretty due to the homebuyer credit, competitive home prices and low rates. So, buyers, take advantage!

The City of Boston has recently advised you of your 2010 assessed value.  If for some reason, you feel that your new value has been unjustly inflated, apply before February 1 for an abatement.  The website link is http://www.cityofboston.gov/assessing/abatement.asp

You must file for your abatement prior to February 1, but then you have 30 days to submit the Information Requisition Form.  Contact me at dgiacobbi@bradvisors.com if you would like assistance in this process.