Aaron Layman's Katy Texas Real Estate Forum

1031 Tax-Deferred Exchanges in Katy, Houston Texas Real Estate

1031 exchange guidelines require timely, professional execution of real estate transactions.  The penalties for not meeting the requirements can have disastrous financial consequences.  Section 1031 of the tax code allows you to avoid paying taxes on the gain of property held for productive use in a trade or business or for investment purposes.

Strict guidelines must be met to take advantage of the tax deferment.  Replacement property must be identified within 45 days of closing of any relinquished property.  The exchanger must also close the purchase of replacement property within 180 days.  A qualified intermediary must also be selected to keep the funds in escrow until the replacement property is purchased.  Any failure to meet the fore-mentioned restrictions will result in full tax liability for any realized gains.

For more information about 1031 real estate transactions you can visit www.ipx1031.com.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Overlapping Appraisal Districts End In Katy, Texas

If you are a resident of Cinco Ranch, Seven Meadows or Grand Lakes, you will be happy to know that the overlapping appraisals with Fort Bend County and Waller County will no longer exist.  Recent property tax and school finance legislation has put an end to the dual appraisal notices and confusing reporting requirements.

For 2008 if you live in Fort Bend County you should only receive an appraisal notice from Fort Bend County.  Likewise for Waller County.  The new rules will make your record keeping a little easier.  That's good news for Katy area homeowners!

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Katy Property Tax Bills Reflect Lower Tax Rates For 2007

Like many Katy area homeowners, you have probably received your Katy ISD property tax bill for 2007.  This year's bill reflects the last phase of the property tax relief which was passed by the legislature.  While the 28 basis point reduction certainly helps, some area homeowners are probably a little disappointed to find that the rise in property values mitigates their actual savings.  Rising home prices continue to erode the overall effect of the tax relief.  While legislators downplayed this scenario, the need for a smaller appraisal cap still exists.

Here is a summary of some of the new area school tax rates for 2007 and the tax bill on a sample $250,000 home:

Katy ISD - $1.526                               2007 Tax Bill - $3815

Cypress Fairbanks ISD - 1.324      2007 Tax Bill - $3310

Fort Bend ISD - 1.25                         2007 Tax Bill - $3125   

Houston ISD - 1.156                         2007 Tax Bill - $2890

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Tax Loophole For Vacation Homes Closing

Due to legislation wrapped into a pending mortgage relief bill, owners of second homes will soon find their tax exclusion disappearing.  Under current law, homeowners could take advantage of the 2-out-of- 5 year residence rule and potentially exclude all the capital gains on the sale of two homes by moving and residing in the second home.  That will no longer be the case once the bill passes this fall.  The bill will provide for some transitional relief, but for sales after 2007 the second home will be subject to taxation on capital gains applicable to the rental or vacation status.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Katy School Board Approves Budget, Lowers Property Taxes

It's official!  The Katy ISD school board officially approved the 2007-2008 operating budget this week.  The newly approved budget includes a 29 cent decrease in the property tax rate for Katy residents.  The new rate of $1.52 per $100 valuation is a welcome sign of relief for tax payer already burdened by rising property tax appraisals.

While the new lower tax rate is welcome, it should be noted that the Katy ISD school board did opt to take advantage of the $0.04 tax hike available under state law.  Under the new school finance law, school districts can take up to $0.04 per year above and beyond the new cap without voter approval.  Anything beyond that $0.04 amount requires voter approval.

For more information about real estate taxes in the Katy area, contact Aaron Layman.  He is a licensed real estate broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Protest Your Katy Texas Property Tax Assessment

Hopefully you are among the many homeowners who protested their tax assessment this year.  As our property values rise, the importance of monitoring the taxed (assessed) value of your home is obvious.  Tax bills have almost doubled for most Texans over the past decade.  The legislature is just now phasing in some of the tax relief that was long overdue, by lowering the tax rates school districts can charge.  Recent rate reductions have largely been offset by higher property values.  As a result, homeowner's tax bills are still bulging and city and state budgets are awash in revenues.

A new appraisal tax cap (5%) is still needed to replace the old 10% cap.  This law prevents your homestead assessment from increasing more than 10% in any one year.  Indexing to inflation is another idea that might keep government revenues under control.  Public officials, of course, are reluctant to pass any bill that will limit the amount of money they can spend.

While we are waiting on additional reforms, you can do some things to keep your bills down.  Make sure you file your homestead exemption when you are eligible.  That allows you to utilize the 10% cap.  If you are 65 or over, you can cap the assessed value from any further increase for as long as you live there.  Also be sure to protest your tax assessment each year if you feel it is too high.  There are a number of reasons you can protest, but you have to file to have a chance.  Standing before an appraiser and arguing that your taxes are too high may seem a bit daunting, but when you have hundreds or even thousands of dollars at stake it only makes sense.

The appraisal review board is usually understaffed, and they don't have time to listen sob stories.  Collect your data and be prepared.  Make your argument in a polite but assertive manner and be prepared to stand your ground.  You might just win your case.  If you don't have time to make the meeting, you can hire several companies to do the job for you.  Keep in mind that these companies are paid a percentage (30%-50%) of any tax savings you reap.  A good Realtor will help you pick out relevant comparable sales and other data that can be used in your case, should you want to go it alone. (Recommended if you are an individual homeowner)

For help with property tax protests you can visit these sites:

www.taxprotest.net

www.poconnor.com

www.assessmentadvisors.com

www.commercialtax.com

For more information about real estate and property taxes call Aaron Layman.  He is a licensed real estate broker in Katy, Texas.  You can call him at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Katy ISD Tax Reduction

The Katy Independent School District is scheduled to approve their tax rate for the 2007-2008 school year.  The district's budget plans call for a new tax rate of $1.52 per $100 dollars valuation.  That will represent a $0.29 reduction from the 2006-2007 tax rate.  This is the final phase of the recent tax overhaul approved as part of the legislature's school finance overhaul.

While the rate reduction is long overdue, it should be noted that higher property valuations will nullify a good portion of the rate rate reduction.  Hopefully the legislature will address the 10% appraisal cap during the next session and provide some additional relief to homeowners who are already burdened by growing tax bills.

For more information about school taxes call Aaron Layman.  He is a licensed real estate broker in Katy, Texas.  You can call him at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

MUD Districts

You have probably heard of a MUD and wondered what it is.  "MUD" stands for municipal utility district.  It is actually a political subdivision authorized by the Texas Commission of Environmental Quality to provide water, sewage, drainage and other services.  MUDs are created when property owners petition the TCEQ.  A hearing is held, and the petition is either granted or denied.  If approved, a temporary board is created until an election is called to elect permanent members and confirm the MUD's creation.  The board will then authorize bonds and taxing authority for bond repayment.

The publicly elected board of the MUD manages and controls the affairs subject to TCEQ guidelines.  A MUD may adopt and enforce all necessary charges, fees and taxes in order to provide district facilities and service.  It should be noted that developers are prohibited from serving or placing employees , business associates or family members on a MUD's board of directors.  Developers must pay for or provide a letter of credit equal to 30% of the cost of a subdivision's utilities.

MUD tax rates vary according to property values and debt requirements.  MUD rates generally decline over time as the MUD is built out and operating debt is shared among more homeowners.  As an example, a house built in 1993 in Cinco MUD 9 has a tax rate of 0.675.  The original, authorized bonds were $20,800,000.  Compare that to a newer home in Seven Meadows in Fort Bend MUD 35.  That 2005 construction would have a tax rate of 1.20 for the MUD, and the original authorized bonds would total $50,000,000.  It can take 25 years or more before all of the bonds are paid, but MUD districts do provide a flexible tool for the development of new neighborhoods.

For for more information about MUDs you can contact Aaron Layman.  He is a licensed real estate broker in Katy, Texas.  You can call him at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.