South Carolina legislators are pushing a new law through that will allow home owners the availability to rent their primary residences as vacation rentals for up to 72 days from the current 14, without effecting their primary status. This means that home owners may elect to have their properties work more efficiently for them and earn their keep in offsetting ownership costs without having to worry about losing their 4% ratio and additional tax breaks.
A similar law was proposed several years ago, but was not successful getting passed. Now the law is coasting through with unanimous approval for vacation homes.
The County Assessor estimates that just under 500 homes will benefit from this plan and that about $1 million a year will be lost in tax revenue, according to the Post and Courier. However, what is not being stated is how this incentive will boost home sales in vacation areas around the Lowcountry, which will, in turn, provide a return in tax revenue to the state.
So, who wins with this program? Just about everybody. Homeowners will be able to better offset expenses, while home sales will boost the economy, aiding restaurants, retail, construction, and every other facet that benefits from a strong home market.
Good job S.C. Lawmakers!
-Brian Caldwell 843.224.7948 firstname.lastname@example.org
Do you think there is too much regulation in the financial industry? My husband, Mark, sent me a link to an interesting article in the NY Times.
The premise is a good one: spell out for the consumer, in plain English, what he is getting. I am amused by the author’s refinancing tribulations as Mark and I are going through that now. I’d give anything to have it streamlined and in consumer English. Heck, I am in the business and am sometimes overwhelmed by the sheer volume of paperwork and foreign sounding words.
Money, money, money. You have to love his comment : “For as long as there has been money, people have been doing stupid things with it.” Here’s a link to the article: The Way We Live Now
Section 1031 of the Internal Revenue Code is most often used in connection with the sale of real property. If you have been in the real estate market looking for a way to invest money and defer taxes, you may have heard about ‘Like-kind exchanges’ or ‘Tax Deferred Exchanges’ as a possible means to accomplish your goals. These are alternate names for what is commonly known as a 1031 Exchange.
This is a simple transaction that allows you to exchange properties of like-kind and defer the taxes. The transaction is simple, but understanding the process may not be! What property qualifies? Here are a couple of examples of what does not qualify:
- 1031(e) livestock of different sexes do not qualify for like kind exchange.
- 1031(h)(1) real property outside the United States and real property in the United States are not of like kind.
I was surprised about 1031(e) and I’m sure you are.
This might be your 1031 “Like-Kind”.
What is the difference between a second home and a vacation home? What taxes are being deferred? How long are taxes deferred? How does this benefit me? As a buyer, should I consider entering into an identified 1031 Exchange? Do qualified exchanges have to be simultaneous? If not, how long do I have to complete a qualified exchange?
There are many more questions depending on each circumstance and it is in your best interest to get correct answers to the questions for your circumstances and not depending on an overview to make your decision. Your professional Realtor® will be able to give information, but a Realtor® is only part of the resources you need. Your Realtor® will identify properties for your consideration. Another team member should be a tax attorney and a CPA who are experienced with 1031 Exchanges. They can give answers to how a 1031 Exchange fits into your portfolio, and how a 1031 Exchange fits into your estate.
If you are interested in a 1031 Exchange in on the Charleston Coast, contact Dunes Properties.
Robert Freedman of Realtor Magazine recently sat down with Linda Goold, The National Association of Realtors’ director of tax policy, and Samuel Whitfield, an NAR legislative representative to discuss the possibility of an extension. The tax credit has been, in Freedman’s words, “the economic recovery’s workhorse.” To date, over 1.4 million households have used the credit. Goold and Whitfield both point out that there is bi-partisan support for extending the credit, but the current Dec 1 deadline is quickly approaching. To watch Freedman, Goold, and Whitfield further discuss of this issue, click HERE.
The first “official” week of summer has just passed and the Charleston sun has been blazing, making a day at the beach delightful and an afternoon snoozing in the shade even better. Summer in this city means farm fresh tomatoes, concerts in the parks, fireworks over the Harbor, dancing on the Pier and so much more. Here, in no particular order, is our list of the Top Ten Reasons to visit Charleston this Summer:
1.The Fourth of July: It’s always a great time to visit Charleston and this year it falls on a weekend, making a spontaneous last minute getaway a fun-filled option. There are tons of celebrations planned all over the city. Some local favorites include…
• Independence Day at Middleton Place: Middleton Place was the home of Declaration of Independence signer Arthur Middleton. Visitors can celebrate the contributions by the Middleton family as well as the Southern Continental Army with two days of period experiences including cooking and musket firing demonstrations. July 4th and 5th
• Fourth of July Blast at Patriot’s Point: This is an action-packed festival featuring rockin’ live music, a terrific one of a kind “Kidz Zone”, cold drinks and adult libations from the beverage garden, a tempting food village featuring some of the best restaurants in Charleston, and when the stars come out….a SPECTACULAR FIREWORKS show! Admission to the landside festival is FREE. Bring your lawn chairs, blankets, smiles and even dancing shoes!
• Sunset Sail on the Schooner Pride: July 4th is a very popular day to be on the harbor. After a long day at the beach or with the family, what better way to relax than a Sunset Sail on the Schooner Pride? The boat will be departing from the Aquarium Wharf at 360 Concord Street (just to the left of the SC Aquarium) on July 4th at 7:00 PM and returning at 9:00. If the Patriot’s Point fireworks display has not started yet, guests will be welcomed to stay on board the boat and watch from the dock, which is just about the best seat you can get for this amazing show. There are only have 49 seats available and this trip will sell out.
2. The Fourth Annual Palette and Palate Stroll: Throughout the year, Charleston boasts many festivals and events that highlight the Lowcountry’s unique culture, specifically art and food. The Palette and Palate Stroll combines the two and allows fine art and food connoisseurs to stroll through our historic streets sampling tastings from thirteen of the finest local restaurants at thirteen of the city’s most prestigious galleries. This is a fun event for the galleries, the artists, the chefs, and of course the lucky few who make reservations to attend. Space is limited but tickets may be purchased on-line at www.cfada.com. Come to Charleston and see why this is one of the most anticipated visual art and fine food events in the South.
3.BBQ: Nothing says summertime in Charleston like some good ole pulled pork barbeque. We do things a little different here than they do in Memphis, Kansas City and especially Texas. We like a mustard-based sauce around here, although you can find your tomato, vinegar, and pepper-based varieties as well. Some folks say that the mustard sauce was brought to SC by German immigrants in the 1730’s, but most agree that Joe Bessinger made it famous in his restaurant here in the 1930’s. No matter where it came from or who introduced it, we think the mustard-based sauce is KING!
There are lots of local spots that specialize in BBQ, but some of our favorites are:
1602 Savannah Highway, West Ashley
•Jim N Nicks Barbeque
288 King St., Downtown Charleston
•Home Team BBQ
2209 Middle Street, Sullivans Island
Looking for BBQ, Blues, and a Harbor cruise? Look no further. This summer you can tour beautiful Charleston Harbor aboard the Carolina Belle with a Home team BBQ buffet and live blues from Shrimp City Slim. For more info check out the Charleston Harbor Tours website.
4. Farmer’s Market: Our nationally-acclaimed market opens every Saturday at 8am in Marion Square to offer Charleston residents and visitors fresh locally grown produce and locally processed food products as well as distinctive hand wrought arts and crafts. Ranked in 2008 by Travel and Leisure magazine as one of the Top 10 Best Farmers Markets in the nation, the 2009 Market offers an expanded variety of food concessions that will tempt appetites from early morning crepes, omelets and donuts to luncheon shrimp and oyster Po-boys, barbecue sandwiches and vegetarian offerings; along with desserts, including Belgian waffles and pies, smoothies and refreshing hand-squeezed lemonade, plus specialized coffees and teas. This is a Saturday morning MUST in the summertime!
5. Historical Significance: As far as this goes, our city has few rivals. Charleston boasts a lot of “firsts” that make it historically significant besides the obvious “first shot fired in the Civil War” (although that one gathers a lot of attention and rightfully so). Here are just a few of our finer “firsts”:
•Few people realize that Charleston is also home to America’s first public Museum, The Charleston Museum which was founded in 1773 to preserve and interpret the cultural and natural history of the South Carolina Lowcountry.
•Our city was also the location of America’s first public library. In November 1700, a law passed by the S.C. General Assembly established a provincial library in Charles Towne and provided for its governance. This library, located on St Philip’s Street, remained in operation for 14 years.
•Henrietta Johnson, who arrived in Charleston in 1708, began painting portraits and became America’s first recognized female artist. Her work can be seen in the Gibbes Museum of Art on Meeting Street as well as many other museums, including the Metropolitan Museum of Art in New York City.
•In 1736, America’s first building constructed solely for use as a theater opened with a performance of George Farquhar’s “The Recruiting Officer”. Currently, the Dock Street Theatre, located on Church Street, is under construction with extensive renovations but will reopen to live performances once again in May 2010 .
•Chartered in 1785, the College of Charleston is the oldest municipal college in America. Additionally, it is the only college in America to have four signers of the Declaration of Independence as founding members.
•The Best Friend of Charleston, the nation’s first regularly scheduled train offering passenger service, originated from Charleston in 1830. It was the world’s largest when the 140 mile rail line was completed to Hamburg, S.C.
This list could go on and on for pages and pages…..the first fireproof building, first golf organization, first tea planted, first musical society, first ballet performed in America, first and oldest landscaped gardens. Charleston is a city of true historical significance. Come see for yourself.
6. Folly Beach Moonlight Mixers: The Edwin S. Taylor Fishing Pier is a breathtaking landmark that stretches 1,045 feet into the sparkling waters of the Atlantic Ocean. At 25-feet wide and 23-feet above sea level, the pier is the second longest on the east coast and offers not only spectacular views, but a variety of fishing tournaments, special events, and dining. In fact, on certain Friday nights in the summer months (the following Saturday, if it rains) the Pier becomes Charleston’s largest dance floor with “Shaggin on the Pier”. These Moonlight Mixers offer folks the chance to dance under the stars to the hottest oldies and beach music around. It’s just a good time at Folly. For tickets call (843) 795-4386. July 10, July 31, August 14, Sept 4, Sept 25, 2009
7. Reggae Nights Summer Concert Series: Good Music. Good Vibes. The Reggae Nights Summer Concert Series features traditional old school roots reggae with a new school attitude in a beautiful outdoor setting. Bring your chairs or blanket. It’s Irie. Concerts will be held throughout the summer at both North Charleston Wannamaker County Park and James Island County Park. For a list of dates and bands, visit the Charleston County Parks and recreation website.
8. Water, water everywhere: Our city is surrounded by a water wonderland with plenty of boating, fishing, skiing, surfing, parasailing, kayaking, kiteboarding, jet-skiing….. you name it, we’ve got it on the Charleston Coast. There are so many options for getting out on the water that we cannot possibly list them all. Here are a few of our recommendations:
• A guided kayak tour with Coastal Expeditions includes interpretation of the human history, natural history, geology, and the flora and fauna connections as they relate to you as a paddler. These tours are led by a group of naturalists who believe kayaking is the least intrusive way to learn about the coastal waters. These tours are truly unforgettable.
• Private surf lessons with Shaka Surf School is the ideal way to stay cool this summer. They have a variety of packages to choose from and all equipment is included. If you’ve always wanted to learn, take advantage of those legendary Folly waves and get on a board!
• The Innisfail: This is an impeccably restored Mathis-Trumpy yacht, commissioned in the 1930s during America’s “golden age of yachting”. Today she has been immaculately restored and is currently berthed at the Charleston City Marina, a private luxury vessel and a floating work of art. This art deco beauty is available for charters. A bit decadent, but don’t you deserve it?
9. Firefly Sweet Tea Vodka: YUM. This truly southern concoction is distilled on nearby Wadmalaw Island, and thanks to a recent modification in SC’s distillery law tours and tastings at the facility have the green light. They will begin in August, every Tuesday through Saturday. This stuff is so smooth and so delicious it can be downright dangerous! Good thing the distillery is in such a gorgeous spot! You may have to rest and relax under a hundred year old oak before the 30 mile return trip to Charleston.
10. Pedal to Properties: This new and innovative way to see properties is one of the coolest new offerings from Dunes Properties’ agent Kristin Walker. Kristin leads prospective home buyers on bike tours through Charleston’s streets, really introducing them to the neighborhoods they are considering. “Island living is about hearing the ocean, the sun in your face and the wind in your hair, and you don’t get that in a car,” Walker said. “It’s the best way to get a feel for the lifestyle you’re about to lead.” Plus, it’s fun, environmentally friendly, and makes finding “parking” very easy.
According to this Wall Street Journal article, Industry Pushes to Extend Home-Buyer Tax Credit, the National Association of Home Builders, other industry groups, and the Business Roundtable, an association of chief executives, are calling on Congress to increase the credit to $15,000 and extend it to all home buyers.
“In February,” according to the article, “Congress approved a 10% tax credit for first-time home purchases, up to a maximum of $8,000. The credit, which expires Dec. 1, phases out for buyers with incomes above $170,000 for married couples and $95,000 for individuals.”
The Business Roundtable is also :
- Pushing for Congress to make permanent recently expanded limits for loans eligible for government backing or purchase.
- Urging policy makers to keep mortgages at or below 5% for one year.
The article provides this estimate: “A buyer typically needs income of $92,000, assuming a 10% down payment, to qualify for a $400,000 30-year fixed-rate mortgage. With rates at 4.5%, the borrower only needs income of around $84,000.”
A new article in the Charleston Regional Business Journal contains information and analysis of the tax breaks offered by the new Stimulus package. Mark Cooter, of the accounting and advisory firm Elliot Davis, offers insight and analysis into some benefits for investors. The new laws are chock full of tax provisions for people interested in making real estate purchases in the current tax year. Besides the first-time home buyers tax credit of $8,000, there are other benefits that may make the decision of “to buy or not to buy” a bit easier for some. Most notable among the incentives is the extension of the bonus depreciation rules, which allow a 50% bonus over standard IRS depreciation allowances on fixed assets until then end of 2009.
Click HERE for the full article.
I originally posted this on my blog, but I wanted to give readers of The Charleston Coast the benefit of this chart as well.
For those of you attempting to purchase your first home and for those of us trying to help you with that, here is a breakdown of the modifications to the First-Time Homebuyer Tax Credit plan.
If I can help you, your friends or family with this, please give me a call or shoot me an email at Betty@BettyPoore.com.