Summer cocktail parties are one of the staples of the nice warm summer months, sometimes too warm. But whether you’re on the beach, on the boat or just hanging by the backyard pool, the conversation at some point will always turn to property values and taxes.
The May sales statistics for Manatee and Sarasota Counties continue to go up overall. This week, we have some new property value information from Manatee County, which was submitted to the Florida Department of Revenue.
Construction was up $1.1 billion in market value, which included 2,502 new single-family homes and 398 new condos. County-wide the taxable values increased from $33.3 billion to $36.1 billion, an 8.16 percent increase.
On Anna Maria Island, the city of Anna Maria had the biggest increase in taxable value between 2017 and 2018 by 10.32 percent. This was the largest increase compared to all other Manatee County municipalities. Bradenton Beach’s taxable value increased 9.3 percent and Holmes Beach’s taxable value increased 7.9 percent. Per Manatee County’s Administrator the fiscal year of 2018 saw a growth of 9.2 percent in the tax base. This means that he does not see the need to increase the property tax rates for the next fiscal year and presented this recommendation to county commissioners.
Last week, we also touched on the new tax overhaul as it related to home equity loans, but here’s a little more detail. Prior law allowed homeowners to deduct interest up to $100,000 of home equity debt to be used for any reason. Under the new tax provision, you will no longer be allowed to take the interest deduction on new or existing home equity loans unless they’re used for home improvements.
The term “home improvements” is broadly defined as anything that adds value to the home such as landscaping or remodeling but not repairs. This can be a definite maybe when calculating your ability to make these deductions and should be discussed with a tax expert.
A lot of homeowners who currently have outstanding home equity loans on their property will not be happy. Note that if you took a home equity loan out 5 years ago to help your daughter purchase a home and have been deducting the interest on this loan for 5 years, you will no longer be able to take this deduction for the 2018 tax year. However, keep in mind that since the standard deduction has increased to $12,000 for single people and $24,000 for married couples with a potential added benefit for filers 65 and older, the loss of the home equity deduction may not be as bad as you think.
In addition, as previously stated, homeowners from high taxed states are seriously on the move. Residents of New York, New Jersey, Connecticut, California, Maryland, and Oregon have the highest state and local tax rates in the country, which are now being capped under the provision of the new tax law.
States like Florida are seeing potential buyers from these and other high taxed states looking for property in the Sunshine State. Creative real estate professionals are marketing the property to out-of-state buyers, pointing out the tax benefits of relocating to Florida.
With property values going up, property taxes not increasing and no state tax, no wonder we’re seeing a huge influx of new residents. If you are a resident of one of the high taxes states, contact me today to find out more about how making Florida your primary residence can make tax season your favorite time of year!