Homestead Exemption

If you purchased a home prior to January 1, 2015 it is time to file for Homestead Exemption.  This allows for a property owner to pay decreased property taxes on their Primary Residence.  Many counties allow you to file for you exemption online; however, please consult your County Website to obtain specific directions.  

Some documents required for filing may include: the recorded warranty deed, the Settlement Statement, a Utility Bill, Driver’s License Number and Car Tag information.  The Homeowner can file for Homestead ANY time before the due date to get the exemption for that year.  Most counties require that the homeowner own the property as of January 1^st to qualify for that year.  If the property is located within City limits, the homeowner may be required to file with the City as well.

Gwinnett County – deadline is April 1, 2015            

770-822-8800

http://gwinnetttaxcommissioner.manatron.com/Tabs/Property/HomesteadExemption.aspx

Fulton County – deadline is April 1, 2015                 

404-612-6440

http://www.qpublic.net/ga/fulton/homestead_inst.html  

DeKalb County – deadline is April 1, 2015               

404-298-4000

http://taxcommissioner.dekalbcountyga.gov/taxcommissioner/homesteadgen.html

Cobb County – deadline is April 1, 2015                  

770-528-8600

http://www.cobbtax.org/property/exemptioninformation

Clayton County - deadline is April 1, 2015              

770-477-3311

http://www.claytoncountyga.gov/departments/tax-commissioner/exemptions.aspx

Cherokee County – deadline is April 1, 2015            

678-493-6120

http://qpublic.net/ga/cherokee/exemptions.html

Henry County – deadline is April 1, 2015                 

770-288-8180                 

http://www.co.henry.ga.us/taxcommissioner/PropertyTaxExemptions.shtml

Forsyth County – deadline is April 1, 2015               

770-781-2106

 http://www.qpublic.net/ga/forsyth/homestead.html

Douglas County – deadline is April 1, 2015              

770-920-7272

http://www.douglastaxcommissioner.net/exemptions_31XR.html

Fayette County – deadline is April 1, 2015               

770-461-3652

http://www.fayettecountytaxcomm.com/subpages/Homestead.asp

Paulding County – deadline is April 1, 2014            

770-443-7606

http://www.paulding.gov/index.aspx?NID=210  

WAIT TIMES TO PURCHASE AFTER A FORECLOSURE, SHORT-SALE, AND BANKRUPTCY

In the ever-changing lending landscape, it is hard to keep up with what the ramifications are of a short sale or foreclosure on your future purchasing options.  In general, you must wait 7 years after a foreclosure, 4 years after a short sale, and 2-4 years after a bankruptcy in order to purchase a new home. However, there are more nuances to the process than that depending on what loan product you are using, which is explained in these charts.

There are also tax ramifications of both a foreclosure and short-sale, which is why it is critical to speak with an attorney and CPA well versed in Georgia law before considering either option. 

The IRS views unpaid debt -- including mortgages -- as income. Foreclosures are treated as the sale of property for federal tax purposes. Homeowners going through a foreclosure will need to calculate their gain or loss for tax purposes, as well as consider any income tax that might be due on the forgiveness or cancellation of debt. These are two separate issues: gain on the sale of the property and imputed income from any debt forgiveness. In official tax parlance, it's known as "cancellation of indebtedness income."  The Internal Revenue Service has a special section on its website for people who have lost their homes through foreclosure. The IRS also reminds homeowners that although mortgage workouts and foreclosures can have tax consequences, special relief provisions may reduce or eliminate the tax burdens for borrowers who lose their homes. This information is available at: http://www.irs.gov/  

Similarly, with a short-sale, after closing a homeowner will probably receive a 1099 in the mail from the sale of the home.  Regardless if the homeowner is fully released from the debt or not, the IRS considers this unpaid debt as extra income to the homeowner. Georgia law allows mortgage companies to pursue homeowners in court for a deficiency for unpaid debt.  So even if a homeowner completes a short sale, there is the possibility of legal action in the future for the mortgage company to try for more money, if the “demand letter” includes such verbiage.  HOWEVER - if the mortgage company sends a 1099 to the homeowner after closing, they have given up the right to sue for a deficiency.  The mortgage company either goes for recovery of the balance through a judgment or writes off the debt and sends a 1099.

Housing Showing Stable Pace in October

Great news! Housing indicators show ongoing strength as prices, housing starts, and future building permits continue to rise nationally. Georgia's statistics reflect the national trend. Housing indicators for Georgia for the month of October are as follows: 

• Median Prices rose 11% to $163,700       
• Average Prices rose 9% to $202,605       
• New Listings increased 4%
• Pending Sales increased 19%
• Closed Sales increased 9%  
• Inventory Levels increased 1.8% to 44,100   
• Months Supply of Homes for Sale decreased 5% to 5.7 months      
• Days on Market decreased 2.6% to 75 days
• Percent of Original Price Received decreased .5% to 93.9%     

It's a great time to sell! If you are considering a move, I would love to help!

Property Taxes

It's tax time in the Atlanta metro area.  Here are some details about how this part of the purchase process and home ownership works:

1.  All taxes are based on a fiscal year. The bill covers January 1 through December 31.
2. Once the tax bill is posted by the municipality it is a lien against the property and must be paid at or before closing.
3. The taxes are prorated on the closing statement.  The closing statement is proof for IRS purposes of the amount paid by each party.
4. When a lender sends a 1099 at the end of the year showing taxes paid, this amount usually does not include amounts paid at closing but only amounts paid out of the escrow account to the tax commissioner.  Buyers and sellers need to consider how taxes were handled at closing when filing taxes.
5. If the taxes are under appeal at the time of closing a “lesser” tax bill is issued. another bill may be mailed much later when the appeal is settled; it must be paid or it will be a lien on the property.  New owners should pay and then contact the Sellers for their share.
6.  The GAR Purchase & Sale Agreement contractually binds the parties to assist in re prorating taxes after closing. 

If you have any further questions about this, please don't hesitate to contact me!

New Guidelines for Purchasing a Home After a Foreclosure

Fannie Mae released new guidelines for the waiting period for purchasing a home after a short sale, foreclosure, and bankruptcy.  In general, it appears that in an effort to streamline the process, they have made all waiting periods 4 years, which in some cases is an improvement and in others is a diminishment.

Fannie Mae announced that on August 16, 2014, they will be changing the waiting period associated with the purchase of a new home after a short sale or a deed in lieu of foreclosure, from a minimum of two years, to four years.

Right now, there is a staggered waiting period that allows a homeowner to purchase a new home with a Fannie Mae conventional loan two years after the finalization of a short sale or deed in lieu of foreclosure. In order to that, the buyer must provide a 20% down payment on the purchase of the new home and have had clean credit since the event.

However, on August 16, 2014, the waiting period for a homeowner to purchase a new home after a foreclosure becomes four years. The good news though is that new home buyers will be allowed to follow standard Fannie Mae guidelines and put as little as a 5% down payment down on the purchase of a home after a short sale.

In addition, if a homeowner can prove that the short sale was due to an extenuating circumstance (loss of job and/or wages), then the waiting period may still be reduced to two years. However, unless a buyer has strong documentation of this, the two year exception cannot be counted on.

In addition, they changed the guidelines with regards to foreclosure after bankruptcy:

Fannie Mae Waives Waiting Period on Foreclosure after Bankruptcy...

Old Rule:

Foreclosure – 7 years waiting period in most cases.

New Rule:

If you filed Bankruptcy and included your home in the Bankruptcy - the new waiting period is just 4 years from the date of Bankruptcy discharge. Not only is this an improvement from the previous 7 year standard, in addition home buyers are no longer penalized for the bank’s delay in getting the title transferred to a new owner.

Effective immediately.