Hello! The first quarter of the year has come and gone. If it’s April, then it’s TAX TIME! Did you pay your PROPERTY TAXES? Hurry! They are due April 10th and you can pay them on-line. INCOME TAXES? They are due April 15th and hopefully you have done something about that, too. And while we are on the subject of taxes…
COUNTY AND CITY TRANSFER TAXES: My comparison of closing costs between North and South (California) in March generated a lot of interest, and one of the most questioned cost was the City and County Transfer Tax. What is it? It is a sales tax on the sale of real property and is a source of considerable revenue for the Counties and Cities. All the counties charge a $1.10 per $1,000 of the sales price and some cities add on their own surcharge. And then there is San Francisco, which charges a graduated tax dependent on the sales price that can go as high as $15.00 per $1,000 for properties over $5 million. Yes, your calculation is correct. For a $5 million property in San Francisco you pay $75,000 just to get the property transferred to your name. Interested in knowing the tax rate for various areas of the state? Click here. When you plan to buy a property, you can check out the rates in advance. For instance, all else being equal, do I buy in Woodland Hills which is part of the City of Los Angeles ($5.60 includes City surcharge) or across the way in Hidden Hills which is not LA City ($1.10 no City surcharge)? Perhaps you don’t care if you are a Buyer and it is the Seller who pays, but one day you may be the Seller and then you will have to shell out!
SALES TAXES: What are Sales Taxes then? Sales taxes are taxes paid for the purchase of goods (not services) by the Consumer to the Vendor who then pays it to the State Board of Equalization, a revenue collecting arm of the State of California. We all know that across L.A. County the rates are mostly at 9.75%. Did you know that some cities, like El Monte, Inglewood, Avalon are at 10.25% (with their surcharge) and South Gate and Pico Rivera are at 10.75%? Click here to find the rate for each city. Don’t feel bad, we are not alone; cities all over the U.S. are taking a hard look at this revenue source, (click here for the article) and so should you, when you go make a purchase. It adds up!
By the way, my company likes to make some of our heavy duty purchases on-line, like computer hardware. Hey, no sales taxes, right? Wrong! Not any more! We recently received notification that the State Board of Equalization is starting to collect sales tax from California businesses for interstate purchases made starting from way back in 2007! Did I tell you California has a budget problem and We The People are going to solve it? It’s only a matter of time when ALL the states find a way to collect interstate commerce taxes. That pair of Louboutin shoes are going to cost waaaaay more than before!
So would you agree that we are being taxed to death?
THAT DARNED HEALTH CARE REFORM: I am not going to expound on this very controversial piece of legislation as I don’t want my head chopped off, but I truly tried to figure out how I was going to be affected. Is everyone struggling like me? This is my good deed of the day: I picked the clearest and most concise breakdowns I have come across and am sharing it with you: Click here for a general overview; click here for a timeline, and click here for a Q & A format. Are we experts now?
SHORT SALES: When I came across an article which started out with this sentence: “Short sales are the hottest thing going in the distressed-property market…” I did a double take and had to look again to see if I was reading an article from 2 years ago. But no, this was just published, so I continued on. I then got to the part about Bank of America and how quickly they are approving their Short Sales and felt my whole world shift. Bank of America? Approving short sales quickly? In what alternate reality? I have one on my desk right now with Bank of America which opened November of 2009 and we still have not received a good approval. Well, the gist of the article was that in its infinite wisdom, the government decided that under the new “Home Affordable Foreclosure Alternatives” program, lenders are going to be compensated with monetary incentives to do short sales instead of foreclosures. ! ! ! Wow, another incredible opportunity to throw some more of our good money at a bad situation. But hey, if this works, Laura, if you are reading this, we should be finalizing your transaction in the next 10 days, right? Click here to read about this “alternate reality”.
…AND LOAN MODIFICATIONS: Right about the same time Bank of America also announced that under an agreement reached with State Attorney Generals over a lawsuit filed over high risk loans made by Countrywide, plans are being formulated to forgive a portion of some customers’ total mortgage balances. Certain conditions apply, but I am wondering if Bank of America ever regrets that they took over Countrywide? Click here.
MORE FIRST TIME HOME BUYERS CREDIT: In an effort to help the struggling construction industry, our Governor Schwarzenegger signed into a law, effective May 1, another measure to give $10,000 or 5% of the sales price, whichever is less, to first time home buyers of property that have never been lived in. This credit is to be given over the course of 3 years. A total of $200 million has been set aside for this. Click here for breakdown on this new law.
THE PIG ZONE: Last month we talked about PIIGS (Portugal, Ireland, Italy, Greece, and Spain). That acronym has really taken hold in the financial world and is now used to describe countries that have overspent and have reached a crisis point of fiscal imbalance. They call it entering “The Pig Zone”. It’s kind of funny, isn’t it, until you take a look at our own economic situation. Are we in the Pig Zone? Not so funny anymore!
AIRLINE FEES: There is no free lunch, literally. As I am going on vacation in about 21 days (who’s counting?!) and am very annoyed with American Airlines’ $8.00 pillow/blankie charge, I thought I should check to see what fees I will have to grin and bear when I am 30,000 feet up in the air with no parachute. And what do I find? Like credit card fees, what you don’t know may just kill you. Some airlines are charging:
- $15 and up for first bag
- $25 and up for second extra luggage
- $50 and up for third extra luggage
- $25 and up for overweight luggage
- $50 and up for oversized bags
- $5 and up for a hard liquor drink
- $3 and up for snacks and/or meal
- $35 and up for pets
- $25 and up for sending an unaccompanied minor (each way)
- $10.00 or more for a seat of choice!!!!
- $8.00 for pillow and blanket
- $?? For using the restroom?!?!
Here is a handy site that will give you a reference chart…. FREE
….and BREAKING NEWS! Spirit Airlines (who?) is charging $45 for a carryon bag that fits in the overhead bin!!!!! Click here. Is that ridiculous? Maybe I shouldn’t grumble about the $8.00 blankie fee?
If you have read your way through to this point, I thank you and I commend your patience. I won’t be back from my vacation in time to put together a May edition, so this is really a Double Issue. Perhaps in my next report I can incorporate interesting tidbits about traveling in the Pig Zone, as I will be doing my best to bolster the economy in Italy and Greece. I guess you could say that I am trying to – PIG OUT!!!! LOL!
Yours in Pig Madness,
Juliana Tu, CSEO, CEO, CBSS, CEI