Note: This article is not meant as tax or legal advice and you should always check with your Accountant and/or Real Estate Attorney to verify your current tax options.

If you are waiting until prices drop to buy a home, you might have a long wait. There are solid reasons to buy a home now, no matter what conditions currently shape your local market.

You gain wealth when you buy property. The average national appreciation in the value of real estate is between 5 and 6 percent annually. If you keep the home, you benefit from home equity ownership interest, whereas if you pay rent, you hand the same money over to someone else.

Building home equity is a means of saving money and having a stable, secure place to live at the same time. The home is yours to change and decorate as you wish, and the more you improve it, the more your investment grows.

Your monthly mortgage payments won’t increase over time like your monthly rent. The U.S. government allows you to deduct the interest you pay on your mortgage and your property taxes.

If you decide to sell the property, you are allowed to keep $250,000 in tax-free profit as a single taxpayer or $500,000 as a jointly filing married couple.

Financial gain, stability, tax savings, predictability and freedom are all good reasons to buy a home in any real estate market.

Note: This article is not meant as tax or legal advice and you should always check with your Accountant and/or Real Estate Attorney to verify your current tax options.

Has your business or investment real estate become unprofitable, does it require large or growing maintenance expenses, or has it reached the peak of its value (making it a lackluster investment)?

If so, you would probably like to have a more profitable investment but are concerned about the tax consequences of acquiring new and different properties.

Because of internal revenue code 1031, it is possible to relieve yourself of current properties and make new real estate investments while remaining tax-free.

One or more properties can be sold and reinvested in any number of other properties and an unlimited number of times without being subject to the normal income tax from a sale as long as they are like-kind exchanges.

This exchange can even take place with properties under development, and as much as six months after the sale of your current holdings. In a like-kind exchange no gain or loss is recognized unless unlike property is received in the transaction, in which case only a portion of the gain would be taxable and the rest tax deferred. This process is called a “tax deferred exchange”.

The tax deferred exchange poses myriad benefits, but it can be easy to invalidate a tax-free exchange without a comprehensive understanding of the forms and codes.

Meeting the requirements of a “trade or business or investment” property, filing for a delayed exchange, establishing intent, and working with a facilitator who can hold funds during the exchange process are all crucial and if done incorrectly can cause an exchange to be invalidated by the IRS. For these complexities consulting an expert is invaluable.

Note: This article is not meant as tax or legal advice and you should always check with your Accountant and/or Real Estate Attorney to verify your current tax options.

Our Board recently had a meeting with our tax assessor Al Garzi. He said that we would be reassessed every four years at 70% of market value.

It’s hard to say that The Town figures will be exactly the same as the figures the real estate community will use since it depends on supply and demand as well as updates etc.

The more updated a home is, the faster it will sell, and since everyone is very busy today with more two family careers, there is less time to tackle home remodeling projects.

If you were thinking of selling in the next year or so I would love to hear from you. Sometimes we can put buyers and sellers together if we know someone has plans to move, then you can save the hassle of being on the market for several weeks or maybe months.

Please remember that for all residents 65 or over, you should call the Town Hall to get your $787 tax credit. Also, for people with incomes not to exceed $55,000, you can defer up to 100% of your tax bill plus simple interest.

The mill rate will be going down consequently the taxes on personal property (cars) will be less. Al said that he expects that when the current evaluation is completed, the town’s Grand List of taxable property will have grown substantially from it’s current $2.75 billion to around $3.9 to $4 billion.

The revaluation is required by the state. The new values will be in place for the Oct. 1, 2002 assessment year, meaning it will not affect tax bills until July 1, 2003.

Note: This article is not meant as tax or legal advice and you should always check with your Accountant and/or Real Estate Attorney to verify your current tax options.

Periodically people ask me about the taxes involved in selling their home. It is as follows:

The State of Connecticut conveyance tax on the sale of residential property is .005 per cent of the first $800,000.00 and .01 per cent of everything in excess.

The Town of Ridgefield conveyance tax is .0025 per cent (note: the legislature has authorized eighteen specific cities and towns to charge a higher local conveyance tax, but Ridgefield is not one of those).

Example 1: Sale of $700,000 house = $3,500.00 State Conveyance Tax and $1,750.00 Town Conveyance Tax

Example 2: Sale of $1,000.000 house = $ 6,000.00 State Conveyance Tax ($4,000.00 + $ 2,000.00) and $5,000.00 Town Conveyance Tax.

Note: This article is not meant as tax or legal advice and you should always check with your Accountant and/or Real Estate Attorney to verify your current tax options.

F.Y.I., if you die and leave your home to someone, that person will inherit your home at its fair market value.

The technical folks say the beneficiaries received a “step-up in basis.” That means if you bought your home in 1950 for $20,000 and it’s worth $500,000 today, the lucky person inheriting your home after you’re gone will never pay tax on that $480,000 gain.

This perk is set to expire in 2010 when the estate tax disappears, so if you’re going to die, do it within the next few years.

Be sure to check out the IRS Publication 523 — Selling Your Home and Publication 530 — Tax Information for First-Time Homeowners, on the web for more details.

Note: This article is not meant as tax or legal advice and you should always check with your Accountant and/or Real Estate Attorney to verify your current tax options.

It seems almost too good to be true: up to $500,000 in gains for sales of principal residences are now tax-free - $250,000 for singles and married couples filing separately.

Even better, this generous break can be “recycled” every two years. To qualify, you must have owned the home and must have used it as your main residence in at least two of the five years preceding the sale.

If you’ve ever considered buying a fixer-upper and selling it for a profit, this is the time to do it. You can live in the house for two years, do your repairs and then wind up paying no federal taxes on your gains of up to $500,000. Like the experience? You can buy another house and do it all over again.

We’re talking about the creation of a new industry here, so expect the prices of suitable properties to start rising as people catch on to the tax break.

On the other hand, if you’re now sitting on a hefty gain that could be entirely excluded under the new rules, think seriously about selling. You can replace the house with a less expensive one and invest the leftover cash.

And I wouldn’t waste much time - this rule is so favorable, I worry that it won’t be around too long.

PS - gains in excess of limits are taxed at a new 20% capital gains rate, down from former 28% and is scheduled to drop even further starting in 2001 to 18%