House of Representatives Passes IRS 1099 Law Repeal

In early February, I shared about a new IRS law that would effect those who own rental properties, where a 1099 would have to be given to anyone who worked on that property if the total amount of work they did was over $600 over any year.

The U.S. House of Representatives voted to repeal the provision, which is located in the healthcare reform law. The repeal provision is called “Small Business Paperwork Mandate Elimination Act, H.R. 4″, according to an article by the Baltimore Business Journal. The Senate passed their version of a repeal last month.

The law as it was passed earlier this year, adding to bill H.R. 5297, would require any small business owner who hires a contractor and pays them over $600 for work in a year to provide a 1099 to that contractor, and file paperwork for tax purposes.

This would include any rental property owners, as they would be considered small business owners under the new provisions. That new rental property law could create issues for many homeowners who may rent out even just one property!

This is wonderful news, and I look forward to hearing it has been signed into law to save Baltimore rental property owners from having to take on this trouble.

How To Apply for the Homestead Tax Credit

What is the Homestead Tax Credit and how do I apply?

The Homestead tax credit limits the increase in the value of the actual property tax a person actually pays is computed. In Baltimore County, the current homestead cap is 4%.

You receive an application to apply for the Homestead Tax credit when your house is reassessed every three years and at the time of sale when buying a house.

For those new homeowners, however, the new owner must be in the house for a year before becoming eligible for the tax credit. For example, if you buy a house in December, and you apply, the credit wouldn’t take effect until July of the following year.

The homestead tax credit is based on ownership and occupancy. In order to be eligible, you must live in the house.

The credit really helps to keep your property tax bill down with that 4% limit on assessment increase!

This chart shows the property tax computation with a decrease in value. This shows you the significant difference in amount of taxes you would pay if you did not receive the Homestead Tax Credit! Most of the years, it is anywhere from $80-400 difference, but years 3 & 4 show a savings on taxes of about $1700!

Here is an article to find out how your Baltimore County tax assessment is determined.

To determine if you are eligible for the homestead tax credit reduction, here is a link to the application.

If you feel your assessment may be too high, and would like to appeal a Baltimore County tax assessment, read more and determine if it may be the right route for you.

Please let me know how I can help you with your Baltimore County home!

This Month in Real Estate March 2011

This Month in Real Estate for March 2011 has been released, and is full of information about rising interest rates and how sellers can showcase their homes best online.

First, Jay Papasan shares that mortgage rates jumped, creating a sense of urgency for some buyers. The average fixed rate for a 30 year fixed mortgage was up to 5.05%, which they had not neared since April 2010.

Pending home sales were up 2% in February over January, which is a normal increase as weather tends to get warmer and we get further away from the holidays. Buyers also hoping to take advantage of low rates were putting contracts in in order to avoid the future rise in interest rates that experts are foreseeing.

Bryon Ellington talks about how a professional real estate agent can help guide you through any type of real estate market.

Recent studies show that 89% of buyers start their home search online, as discussed in the February This Month in Real Estate video. This means that a professional presentation of your home is important!

* Well taken photos are needed to best show your home.
* A professional stager may be very useful to have your home put its’ best foot forward to potential buyers.

To learn how to best market and sell a Towson home, contact me today. I would be thrilled to help!

Oregon Ridge Pancake Breakfast 2011

The Oregon Ridge Nature Center in Cockeysville is having its’ annual Pancake Breakfast this Saturday and Sunday, March 5 & 6, 2011 from 8am-noon.

Using real maple syrup from the trees in the park, like that tapped last weekend at the Maple Syrup event, it should be a great time for all!

Tickets are $6.00 for adults, and $3.00 for children aged 2-8, and can be purchased at the door.

Come to Cockeysville this weekend, and enjoy some beautiful nature and yummy pancakes and real maple syrup!

Oregon Ridge Nature Center is located in Oregon Ridge Park at 13555 Beaver Dam Road, Cockeysville, MD 21030. The Nature Center is open Tuesday through Sunday 9-5, and the park is open daily from dawn to dusk, plus additional hours for special events.

FHA Mortgage Insurance Premium To Rise April 18, 2011

The FHA annual mortgage insurance premium is set to rise by .25% for any loan case numbers assigned after April 18, 2011.

Bob Mowrey, from Corridor Mortgage Group, let me know just what this could mean to FHA buyers.

On average, he says, this would mean that buyers will pay an extra $30/month. For a $300,000 loan, the difference in payment would be about $60/month.

FHA Homebuyers need to have their contract on a house in place, their loan in motion, and the FHA loan case number assigned prior to April 18, 2011 to qualify for the .25% lower mortgage insurance premium amount.

Please contact me for more information and details on the FHA mortgage insurance premium changes, and how they may affect your homebuying power!

Why the Housing Market Bottom May Be Here

Many buyers and sellers are trying to time their sale or purchase based on whether they feel house prices may have hit the bottom or if they will fall further.

According to a recent USNews Money report, the housing market bottom may already be here. Why?

• Some areas show homes are undervalued, and increases in prices have already been seen. I know that a house that just came on the market nearby me in Towson sold in less than a week — with a large number of showings, and possibly multiple contracts.

• Affordability is great:  Interest rates as well as home prices have been low. Interest rates have been showing an upswing recently, so that affordability index may fall.

• Economic Factors are improving: Consumers are spending, larger companies have more money to hire, which will bring more demand to the real estate market. The foreclosure market, which, due to the subprime lending debacle, really came to a head in 2010 due to many of those loans hitting their 5 year-ARM mark, and made those mortgages unaffordable. Though 2006 still had some of those easier lending stipulations, many foresee the worst of that wave being behind us, and credit being eased a little as banks own less inventory.

Add onto these indicating factors that the FHA annual mortgage insurance premium will rise .25% for any loans having their FHA case number assigned after April 18, 2011, and you have many buyers needing and wanting to get into houses now, before that change happens.

Economists do predict that mortgage credit will open up a little more as we hopefully get further from the foreclosure crisis, which will open the door for some buyers to return to the market. What may happen, though, is that interest rates will rise a bit, possibly keeping prices a little lower than normal.

Contact me for Baltimore County real estate market information. I can help you figure out where your home falls in the housing market!

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