The county commissioners have moved up the due dates for county tax bills this year, which led some taxpayers to speculate that the county is hoping to generate additional revenue through late payment fees. But county officials said that the deadlines have changed so that the county can get tax revenue sooner rather than later. If the county gets money earlier, said Chester County Treasurer Anne Duke, it can avoid having to take out a loan to cover early 2010 operating costs. The early payment deadline has moved forward to March 16. Those who pay their bill by this date will get a 2 percent discount on their bill. The “face value” payment deadline is has moved to May 15, and anyone who pays their taxes after this date will face a 10 percent late payment penalty.
The pressure is increasing on Congress to renew the homebuyer tax credits for a third time.
The first $7,500 tax credit was passed in 2008 and required first-time buyers to repay the credit over 15 years. A few months later in 2009, Congress expanded the credit to a maximum of $8,000 that didn’t have to be paid back.
At the end of last year, Congress extended the benefit again until April 30 with an extra two months on top of that to close. A new credit of $6,500 was added for move-up buyers, too.
Now representatives of the housing industry are lobbying for another extension. Some experts, including Mark Zandi, chief economist at Moody’s Economy.com, who supported the earlier credits, think the time has come to let it go.
“It’s worn out its benefit,” he says. “If you extend it again, it isn’t going to do much, and what you’re doing is providing a tax break to folks who bought anyway.”
Do you believe the credit should be extended or discontinued?
The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.
While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common. In Pennsylvania, at least in the areas that I practice, both signatures are common.
For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.
The Upper Providence (Delco) council will consider a 0.5% increase in the realty transfer tax at its February 11 meeting. This would bring the total real estate transfer tax to 3% in Upper Providence. If passed, Upper Providence would have the highest realty transfer tax rate of any suburban Philadelphia municipality.
What does this tax increase mean to you?
* Another $2000 would be added to the closing costs of an average Upper Providence home;
* Upper Providence would have the highest realty transfer tax rate in the Delaware Valley
* Amongst surrounding townships, Upper Providence’s realty transfer tax rate would be double, making homes harder to sell and lowering home values.
Appeal to the council and oppose this tax increase today!
Beginning Feb. 1, the Federal Housing Administration will provide mortgage insurance for some purchases in which the seller bought the property and held it for fewer than 90 days.
The agency is changing what is known as the “anti-flipping rule” to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes, says FHA Commissioner David H. Stevens.
Waiving the 90-day rule will encourage private investors to buy vacant properties, fix them up, and quickly sell them to buyers who will be eligible to buy them using FHA financing.
Sellers who get more than one offer should be aware that the highest offer isn’t necessarily the best offer, say experienced practitioners.
In this tough market, going with the buyer who has enough cash to pay a large down payment and who won’t be scared away if the inspection uncovers some needed repairs is often the wise choice.
Practitioners should encourage sellers to review all the terms and conditions of the sales contract. In some areas, the allocation of fees can take a big bite out of the net proceeds. While most contracts are written to reflect that, it isn’t always the case.
Also, the closing date in the offer should be considered carefully. A buyer who can close quickly can save a seller thousands. Offers contingent on the sale of another property are particularly suspect in this market.
Although the total amount has declined in recent months, the Montgomery County Recorder of Deeds collected more real estate transfer tax revenue than any other county in the state of Pennsylvania. The Recorder of Deeds collected $74.9 million in transfer taxes in the past fiscal year, which is good news for homeowners as it points to property values holding steady in Montgomery County.
Upper Makefield supervisors got a first look at the proposed budget for 2010 which includes the possibility of a 14 percent tax increase or 2 mills. The increase is necessary to offset falling revenues from earned income tax, permit fees and real estate transfer taxes. The average home assessed at $72,426 would pay an additional $144.85 per year in real estate taxes. Upper Makefield supervisors discussed various options for reducing or eliminating the need for a millage increase, including salary freezes and a more realistic revenue forecast. Click here for more information about the proposed budget and meeting dates.
Delaware County property taxes could go up by 8.9 percent in 2010, according to a preliminary budget released Thursday. The proposed increase [Read more...]
West Bradford supervisors recently approved an agreement for the Smith Farm development plan. The agreement will allow for a 125-home development and preservation of the existing cattle farm. [Read more...]