Monthly Archives: June 2013

06.26.13
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Check Out This Beautiful Lot in Sunny Cape Coral, FL!

TaxMapImageOur feature lot this week at 9 Core Realty.com is a western facing lot on a beautiful treelined street.  Located at 4930 Agualinda Blvd.  Cape Coral, FL 33914, this lot is in one of the most desirable areas of the state.  Cape Coral is located on the Gulf of Mexico in Southwest Florida and is the suburb to neighboring Fort Myers.  A vibrant waterfront community, Cape Coral boosts the highest number of canals in the world (even more than Venice Italy) and is a boater’s paradise with direct access to the Gulf of Mexico and the Caloosahatchee River.

Our feature lot is located in the Southwest section of Cape Coral, a highly desirable area of town with luxurious, modern homes, golf courses, shopping, restaurants, nightlife, and just a short distance to downtown.  The area boasts many canals, and the Gulf of Mexico is just a couple of minutes away.  There are excellent schools in the area; an Elementary, Middle and High school are all located just about a mile away.  Once built, the backyard would face the west, allowing for optimal views of the gorgeous Florida sunsets.

Or call (239) 333-2221 and speak to one of our expert land sales representatives at 9 Core Realty.

 

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06.17.13
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SWFL Real Estate Report- June 2013

Southwest Florida is a great place to call home and an even greater place to invest in property, especially land.  The area was hit hard by the housing market crash of 2008, but over the past five years has seen a major resurgence in the real estate market.  April 2013 sales numbers were recently released and indicate that 2013 will continue to be a strong year for the market in the SWFL region including Cape Coral and Ft. Myers.

The median sale price rose 29.8% over last year from $140,199 to $182,000 this year.  The average sale price rose 23.1% from $237,281 last April to $292,201 this year.  Prices have definitely risen this season; however they typically do this time of year.  We are comparing numbers of last year at same time, so it’s a legitimate 30% increase over last year.

April 2013 prices are up over March numbers which is also typical.  April’s $182,000 was up over March’s $168,000.  As we move forward in the year, we’ll have to watch as last year prices hit their plateau before steadying out the rest of the year.

When prices are rising people automatically assume it’s across the board and they can add 30% to last year’s home value regardless of what price range their home is in.  This simply is not true, although we have seen increased sales in almost every category.  The over $1 Million category continues to struggle.  The SWFL real estate market is on the rise, but the overall economy may be holding back super premium prices combined with excess inventory in the $ 1Million+ category.  We hope to see continued economic growth with added jobs from Hertz moving to the region and other large, national firms expected to follow suit.

06.10.13
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Tax Breaks for the Development of Raw, Vacant Land

In last week’s edition of our Land Sales Blog we discussed the plentiful tax breaks for taxpayers that own land as an investment.  This week we tackle tax breaks that you can benefit from if you choose to develop that raw land for residential or commercial uses!

Land developments and improvements are projects that land owners may carry out on their property to beautify them, add utility and generally make them more valuable.  In some cases, the funds that property owners spend on land improvements or land development may come back to them in the form of tax credits, thus reducing or eliminating the cost of the project by reducing the tax burden.

Land improvement can be defined as any physical project that a real estate owner carries out to raise the value of the land.  Land improvement projects can be simple matters, such as adding sidewalks or wiring lighting for walkways.  They can also be large, complex projects, such as demolishing old buildings and constructing new ones.

While real estate projects can result in both tax credits and tax deductions, real estate owners should understand the difference between a credit and a deduction before trying to figure the net effect that a particular land improvement project has on his tax burden.  A tax credit is a flat amount of money that a person subtracts from the total amount of money he must pay in income tax.  A tax deduction, on the other hand, reduces the amount of his income on which the government levels income tax.

While many types of land improvement projects can result in tax deductions, only select types result in tax credits.  For instance, for the 2012 tax year, the federal government offered tax credits to home owners who had invested in property improvements that promote energy efficiency.  Such improvements may include the installation of photovoltaic solar cells or biomass stoves.

In addition to tax credits that the federal government allows for land improvements, various states may also issue tax credits to land owners who make qualified improvements to their land.  Only states that levy an income tax offer such credits.

To make the most out of land investment and incur the highest tax deduction it is best to consult a professional investment consultant or your accountant.  To learn more about the development of vacant land or to purchase vacant land for investment or development contact a member of the 9 Core Realty land sales team at (239) 333-2221.

06.03.13
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Vacant Land Rolls in Tax Savings for Investors

With all of the discussion lately of the benefits of home ownership, it becomes easy to forget that these benefits apply, in one form or another, to just about any type of real estate ownership.  This can include the ownership of raw land.  Whether held for investment or residential purposes, a parcel of land comes with a number of tax deductions built-in.

1) Mortgage Interest

As long as your land is held as a primary residence, secondary residence or investment property, the mortgage interest that you pay on it is tax deductible. As of May 2013, if it is a residence, you will itemize the deduction on your Schedule A, as long as the total value of your first and second homes is $1,000,000 or less if you are married or $500,000 are single.  If you hold the land as an investment, you can report its interest as an expense on your Schedule E.

2) Property Tax

Property tax is treated similarly to mortgage interest.  For land held as a personal residence, you can deduct it on your Schedule A.  Your ability to deduct property tax, as well as other state and local taxes, can be limited, though, if you are subject to the Alternative Minimum Tax.  Because the property taxes on land held as an investment are expendable on Schedule E, though, they are not subject to AMT limitations.

3) Miscellaneous Expenses

If you hold your land as an investment for which you file Schedule E, you can expense just about anything you spend in the process of owning it.  Traveling to inspect the land would be an allowed expense, as would the cost of clearing or cleaning it, as well as maintaining any roads through it.  You cannot take these expenses as deductions on your Schedule A for land held as a primary or secondary personal residence, though.

4)  Depreciation and Land

Although investment property is depreciable, land held for investment purposes is not.  The reason for this is that while buildings gradually decay, land is generally permanent.  Barring some sort of large natural process like earthquake, flooding or large-scale erosion, most land was in existence hundreds of years ago and will be in existence hundreds of years from now.  However, certain improvements that you make to your land, like roads or certain types of land preparation can be depreciated on Schedule E over the improvement’s individual useful life.

To learn more about all the tax benefits of owning land contact a 9 Core Realty representative at (239) 333-2221.  Be sure to check back on this blog for more upcoming articles in our land taxation series!  The next blog in this series will cover tax breaks for the development of raw land!