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10 Real Estate Tax Deductions to Consider

Property Tax Information for Rock Hill and Fort Mill SC

Tax Deductions for York County, SC Home Owners

 

The state of South Carolina recently passed a series of changes in property tax law.  The changes affect home owners in Rock Hill, South Carolina, Tega Cay, Lake Wylie, Fort Mill, SC and all of York County.  York County home owners receive a favorable 4% tax rate on their PRIMARY residence as opposed to the 6% rate for second homes.  In additional, the changes included a point of sale provision that invokes a re-assessment when a property is sold.  This particular change is under re-consideration at this time.

 

York County SC also allows residents over 65 to apply for a Homestead exemption.  This exemption lowers the rate even further, making our area one with extremely favorable property tax rates.

 

The Homes in the Piedmont professionals work with home buyers daily, and we provide buyer clients with current tax information including the current taxes paid on a particular property, the potential change, if any, and information about other tax advantages.  In addition, the SC closing attorney will review the SC property tax situation at closing and will provide home buyers with the forms necessary to claim the 4% rate and the homestead rate should it apply.

 

FIRST TIME HOMEBUYER TAX CREDIT

 

One of the best tax advantages for home buyers is the Federal Housing Tax Credit available through June 30, 2010.  If you are a first time homebuyer or someone who has lived in your current home for two years, this tax credit is an incredible opportunity. 

 

OTHER TAX DEDUCTIONS THAT YOU SHOULD DISCUSS WITH YOUR TAX ADVISOR

 

Below are 10 Tax deductions you should discuss when it comes to Real Estate tax savings. At Homes in the Piedmont, we provide our clients information to help in the home buying and selling process.  Although tax law changes from year to year, here are 10 most frequently overlooked deductions:

 

1.       Loan fee points paid to obtain a mortgage for a Primary Residence in tax year

        Lender points are deductible as itemized interest on schedule A

        The IRS 1098 provided by your lender may not include the loan fee. Review your closing statement!

 

2.       Loan fee paid to REFINANCE your home

        Refinance points are deductible over the life of the mortgage. 

        For example, a $3000 loan fee on a 30 year mortgage can be deducted at $100 per year

 

3.       Refinance a prior refinanced loan

        Deduct remaining undeducted loan fee in the year of refinance

        For example, you had $2000 of undeducted loan fees from a prior refinance, deduct the $2000 as a lump in the year of the second refinance

 

4.       Mortgage prepayment penalties

        If sold or refinanced in tax year, and prepayment penalty was collected, prepayment qualifies as tax deductible interest

 

5.       Unreimbursed moving costs for a new job location (a 50 mile test applies)

        If you changed residence and job location, unreimbursed moving costs can be deducted if residence movie comes within a 12 month period before or after your movie

        Use IRS 3903 to claim the tax break. 

 

6.       Uninsured sudden, unusual or unexpected loss

        Losses form fire, flood, hurricane, tornado, accident, theft, embezzlement, vandalism, snow, rain, water damage typically apply.

        SLOW losses like termite damage, dry rot, rust, moths, erosion, corrosions, do NOT qualify.

        Deduction must exceed 10% of adjusted gross income plus $100 floor per event.

 

7.       Prorated property taxes in the year of the sale or purchase of a home

 

8.      Prorated mortgage interest in the year of a home sale or purchase

 

9.   Prepaid property taxes and mortgage interest (e.g.2008 interest paid on 2009)

 

10.    Ground rent if your home is on leased land

 
For complete information, always consult your South Carolina personal tax advisor.

Elaine Whitton Davis
Elaine Whitton Davis
Your York County SC Real Estate Experts