About to buy a place at Savannah in Columbus Grove - Any advice on the area and development?

NEW -> Contingent Buyer Assistance Program
You can't compare numbers like that. The Mello Roos and the Property Tax are tax deductable. And so is the interest. On top of that I am not renting anymore and paying someone else's mortgage instead I'll be paying my own. Isn't that the whole point of buy a house....something called equity?



That and what is everyone's problem on this site. I asked for information about the area and the builder and all of the sudden it's I should be buying a two bedroom instead of a one or if I should be buying at all. That wasn't exactly the question I asked.



I really would like anyone's input about the area if they live there or about the builder, etc.



So No_Such_Reality, do you own a house? And if so, why did you buy if there were additional taxes and fees that come with a house?





[quote author="No_Such_Reality" date=1238222200]So to get a one time tax credit of $8000, you're going to subject yourself to

$9,462.63 in additional taxes and fees a year for a 'long time'.





[quote author="genie117" date=1238219364]Man I feel like I'm being crossed examed at a murder trial here.



The HOA is $300/month

The Mello Roos are about $2,462.63

Property tax paid will be $3,400

I think comparable apartment would around 1,600-1,800 a month. The after tax cost more a month would be about $200-$300.

The $8,000 credit represents a drop of 2.5%, but I'm already getting a good deal on the property that I think I'm already 10%-15% below market.



Any other questions?



[quote author="No_Such_Reality" date=1238218380]How much is the HOA?



How much are the mello roos?



How much new property tax will you pay?



How much will it cost to rent a comparable IAC apartment? What's the after tax cost/month for owning?



$8000 of tax credit represents what percentage drop?</blockquote></blockquote></blockquote>
 
So the builder has been pretty responsive with fixes. Do you know how long the warrenty from the builder is? I guess I should find that out from my agent huh?



Thanks for the information!!!





[quote author="Shooby" date=1238221372]I purchased a Lennar home, and so far I have been satisfied with their build quality and customer service. Whenever I have an issue, their guys respond within the next day.



I noticed some pipe leaks during construction, but they took care of the problem and made sure there was no potential mold problems.



I'd probably buy another Lennar home in the future. I'd still prefer Standard Pacific though.</blockquote>
 
I'm gonna see if i can find any more information about this. If I do I'll post up.



Thanks!



[quote author="Johnny" date=1238222089]



i found these from other forum;



Apparently drywall from China has too much sulfur and is releasing sulfur fumes and corroding copper wiring.



Article in the latest Journal of Light Construction described the situation in some detail. There are two class-action suits pending against two companies who imported the Chinese drywall. This happened in 2006-2007 when there was a serious shortage of drywall, and it appears that the Chinese drywall was used only in Florida.



One major builder - Lennar Homes - is one of those suing, and they are doing their best to correct the situation.



as of today as many as 40 other states may be affected as well, including Arizona, California, Alabama, Nevada and Louisiana.</blockquote>
 
Lennar's new home warranty is one year.



You should also know this forum is mostly full of bears. Ask a question like "What do you guys think of this purchase" and 99.9% of the time, you'll get the answer "Don't buy now". Just FYI.
 
Man...thanks for the information. If you don't buy now then what? Wait 2 years when the interest rates and property prices are back up?





[quote author="Shooby" date=1238223053]Lennar's new home warranty is one year.



You should also know this forum is mostly full of bears. Ask a question like "What do you guys think of this purchase" and 99.9% of the time, you'll get the answer "Don't buy now". Just FYI.</blockquote>
 
In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.



P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.
 
[quote author="genie117" date=1238213822]It is a credit and not a deduction so it is a straight $8,000 tax credit against your Federal income tax. So the chances that you owe the the Federal Government less then $8,000 plus the standard deduction (which I believe is now $5,450) is probably pretty low. I'm sure you can probably carry that credit forward to your next years tax return too if needed?



Not 100% but this is what I believe is the case.



My tax liability is very large due to the fact that I do not own right now and have no other deductions so it will actually come back to me as an additiona refund of $8,000 that you can actually use on your 2008 tax return instead of waiting until next year to take it. Even if you bought in 2009.</blockquote>


I have not checked lately, but IIRC, it is a one year non-refundable credit; no carry back or forward. That is why I was asking about your personal tax liability. I do not want to know what your situation is as much I want to alert you to checking to make how it will affect your particular situation. If you will only have a small tax liability because of higher deductions in the year you purchase, and the credit is non-refundable, ( for all you non-tax geeks, a refundable credit is one you receive whether you incur tax liability or not, such as EIC, and a non-refundable credit is one that is only available up to the amount of your current tax year liability, which is what the majority of tax credits are), it may be worth much less than $8,000, or even nothing at all. And for one of the available years, it is actually a loan which must be paid back.
 
Found this on the IRS site. Looks like only certain parts are deductible so I'd have to look at the breakdown of the bill more closely.



<em>You cannot deduct Mello-Roos taxes if they are assessed to fund local benefits and improvements that tend to increase the value of your property. Mello-Roos taxes may appear on your annual county property tax bill with other deductible property taxes. That does not mean you can deduct the Mello-Roos taxes. You may only be able to deduct a portion of the total property tax shown on your bill.



Most of the time, you cannot deduct real estate taxes assessed for local benefits and improvements. However, you can deduct them if they are for maintenance, repair, or interest charges related to those benefits. Some examples of local benefits are:



Sidewalks

Streets

Sewer lines

Water mains

Public parking facilities

Other similar improvements

To deduct local benefit taxes, you must be able to show the amount of the taxes that are for maintenance, repair, or interest. If you cannot show what part of the local benefit taxes are for these charges, you cannot deduct the taxes.</em>







[quote author="graphrix" date=1238225112]In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.



P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.</blockquote>
 
So how much more do you think prices will drop? Another 10%? 20%?



Shouldn't you take into account the tax deduction you would have receive over those two years when instead you are paying rent still and more taxes? Just my thoughts.





[quote author="graphrix" date=1238225112]In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.



P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.</blockquote>
 
[quote author="graphrix" date=1238225112]In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.



P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.</blockquote>


I will respectfully disagree with Graphcakes. The Fed will be buying MBS, and more importantly the Fed will be buying the long bond, but within two years interest rates will head up no matter what the Fed does. And home prices will continue to fall. If massive price inflation occurs, home prices may increase in nominal dollars, but in real dollars, they will continue to fall.





Mello Roos taxes are <strong>NOT</strong> a deductible expense for a residence. They are deductible for a business property if the Mello Roos taxes are a legitimate expense to the business, (ie. rental). It is highly unlikely one would be audited due to an inflated property tax deduction, (like including Mello Roos). The taxpayer would more likely receive a CP2000 with a "adjusted" property tax amount, a recalculation of tax liability, and a bill for the additional tax, interest, and penalties, or it would request documentation for the expense. And when the taxpayer mails or faxes their prop tax bill showing the Mello Roos, then another CP2000 would be issued for ..., and time to pay up. Many folks get away with including Mello Roos in their prop tax deduction, but it is expensive to get caught.
 
[quote author="genie117" date=1238225750]Found this on the IRS site. Looks like only certain parts are deductible so I'd have to look at the breakdown of the bill more closely.



<em>You cannot deduct Mello-Roos taxes if they are assessed to fund local benefits and improvements that tend to increase the value of your property. Mello-Roos taxes may appear on your annual county property tax bill with other deductible property taxes. That does not mean you can deduct the Mello-Roos taxes. You may only be able to deduct a portion of the total property tax shown on your bill.



Most of the time, you cannot deduct real estate taxes assessed for local benefits and improvements. However, you can deduct them if they are for maintenance, repair, or interest charges related to those benefits. Some examples of local benefits are:



Sidewalks

Streets

Sewer lines

Water mains

Public parking facilities

Other similar improvements

To deduct local benefit taxes, you must be able to show the amount of the taxes that are for maintenance, repair, or interest. If you cannot show what part of the local benefit taxes are for these charges, you cannot deduct the taxes.</em>







[quote author="graphrix" date=1238225112]In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.



P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.</blockquote></blockquote>


Mello Roos is not an allowable deduction in any part of Orange County. All Mello-Roos taxes in Orange County have been determined to fund local benefits and improvements that tend to increase the value of your property.
 
[quote author="genie117" date=1238225956]So how much more do you think prices will drop? Another 10%? 20%?



Shouldn't you take into account the tax deduction you would have receive over those two years when instead you are paying rent still and more taxes? Just my thoughts.





[quote author="graphrix" date=1238225112]In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.



P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.</blockquote></blockquote>


Stockton/Sacramento, not much if at all. Same with San Bernadino and parts of Riverside and other parts of the Inland Empire. Irvine, another 40% in real vs. nominal dollars.
 
[quote author="awgee" date=1238225325]

I have not checked lately, but IIRC, it is a one year non-refundable credit; no carry back or forward. That is why I was asking about your personal tax liability. I do not want to know what your situation is as much I want to alert you to checking to make how it will affect your particular situation. If you will only have a small tax liability because of higher deductions in the year you purchase, and the credit is non-refundable, ( for all you non-tax geeks, a refundable credit is one you receive whether you incur tax liability or not, such as EIC, and a non-refundable credit is one that is only available up to the amount of your current tax year liability, which is what the majority of tax credits are), it may be worth much less than $8,000, or even nothing at all. And for one of the available years, it is actually a loan which must be paid back.</blockquote>
<em>

<strong>If I?m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?</strong>

Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have lready submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.



<strong>I heard that the tax credit is refundable. What does that mean?</strong>

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.



For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).</em>





You can take the credit on your 2008 return and it is refundable. This program replaces the other program where you took at $7,500 early credit that you had to pay back. So this new program is for $8,000 which is refundable and you can take it on your 2008 tax return if you bought in 2009. I've already done a lot of research on this topic prior to looking into buying a house.
 
[quote author="asianinvasian" date=1238224579]CA is also giving 10k tax credit. 8k + 10k = 18k total</blockquote>


Unfortunatly, this credit is only for brand new construction. The credit states that the house you are buying has to have never been occupied before. Those builders must have paid a lot of money for some lobbiests.
 
[quote author="genie117" date=1238226464][quote author="awgee" date=1238225325]

I have not checked lately, but IIRC, it is a one year non-refundable credit; no carry back or forward. That is why I was asking about your personal tax liability. I do not want to know what your situation is as much I want to alert you to checking to make how it will affect your particular situation. If you will only have a small tax liability because of higher deductions in the year you purchase, and the credit is non-refundable, ( for all you non-tax geeks, a refundable credit is one you receive whether you incur tax liability or not, such as EIC, and a non-refundable credit is one that is only available up to the amount of your current tax year liability, which is what the majority of tax credits are), it may be worth much less than $8,000, or even nothing at all. And for one of the available years, it is actually a loan which must be paid back.</blockquote>
<em>

<strong>If I?m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?</strong>

Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have lready submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.



<strong>I heard that the tax credit is refundable. What does that mean?</strong>

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.



For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).</em>





You can take the credit on your 2008 return and it is refundable. This program replaces the other program where you took at $7,500 early credit that you had to pay back. So this new program is for $8,000 which is refundable and you can take it on your 2008 tax return if you bought in 2009. I've already done a lot of research on this topic prior to looking into buying a house.</blockquote>


I was wrong.



Real wrong.



It seems I was only informed to the first credit and was not considering the changes.



I am glad you checked.
 
So the mello roos are not deductible. Now I'm trying to remember what it was that my mortgage guy told me was deductible? Ugh....I guess I better call him again.



This is all really a little overwhelming.
 
[quote author="genie117" date=1238226905]So the mello roos are not deductible. Now I'm trying to remember what it was that my mortgage guy told me was deductible? Ugh....I guess I better call him again.



This is all really a little overwhelming.</blockquote>


Please do not ask your mortgage guy. Ask your tax guy.



Or think of it like this. What does the Mello Roos tax pay for?

Answer: Sewers, streets, water lines, etc.

Did those improvements add value to the property?

Yes.

Therefore, they are not dedcutible.

Or at least, that is what the US tax court determined.
 
[quote author="genie117" date=1238223391]Man...thanks for the information. If you don't buy now then what? Wait 2 years when the interest rates and property prices are back up?





</blockquote>




And how do you know if property prices will be back up? You need to realize that 1-bedrooms don't appreciate that much since most people who move to the Irvine area are families. You do know about the plume and the big airplane hanger over there right?
 
Genie,



I was looking at some of the 2 bedrooms for 409k, I put in an offer of 390k and the owner called it Frivolous ...(we will see in 2-3 months)

can you tell me the range of the 1bedroom?



Thanks!
 
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