Late this afternoon, Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law.

AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year.

The state’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner.  Unlike last year’s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.

AB 183 will significantly contribute to the effort to stimulate jobs-creation within California’s housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon and returned to the lender, or have been sitting on the market for extended periods of time. It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities.

• First Time Home Buyer Tax Credit
• Federal Homebuyer Tax Credit Deadline is Quickly Approaching
• How the California NEW HOME Tax credit Affects the Santa Clara Valley
• FHA Home buyers’ tax credit can be turned into cash at closing
• Economic Stimulus and Tax Credit

333 Santana Row #310

Condominium
Status: Active
MLS#: 80957799
List Date: 12/21/09
Price: $421,950
Original List Price: $435,000
Location: 333 SANTANA RW #310
City: San Jose, CA 95128
Bedrooms: 1
Bathrooms Full: 1
Bathrooms Half: 1
Approx. Sq. Ft.: 1099
Approx. Lot Size: 435.sf
Approx age: 8

With the rental market still strong and Santana Row still the hottest place around this is sure to be a good investment.  Recently a 65,000 sqft. office structure has just been completed and ready for occupancy.  Once leased, expect business in Santana Row to increase and perhaps demand for the units there will increase as well.  If you can get this unit at this price it is a bargain.

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• The requirements for Proposition 90 in Santa ClaraCounty are the same as for Proposition 60 except for the following:  

• The effective dates and filing fees vary from county to county. Those property owners interested in transferring the base year value from their principal residence located in Santa Clara County to a newly purchased residence in another county should call that county to make sure that the other county is participating in Proposition 90.
• The following is a list of those counties which have approved Proposition 90 and will currently accept base year value transfers from other counties.

Similar Posts:

• Prop. 60 & 90 Santa Clara County
• Proposition 8 Temporary Assessment Relief, More Information
• How Santa Clara County Proposition 13 Works
• First Time Home Buyer Tax Credit
• New California Homebuyer Tax Credit for 2010

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A Proposition 8 reduction is a form of assessment relief. It may be applied when a property’s assessed value exceeds the current market value.  In May all property owners receive notification of their assessed value in the form of a postcard.  An informal Proposition 8 request submitted to the Assessor is separate from a formal assessment appeal filed with the independent Assessment Appeals Board.  In 2008 the Assessor’s Office has proactively provided over 41,000 properties with temporary Proposition 8 reductions in assessed value. 

The filing period for Proposition 8 relief ended September 15.

Proposition 8, passed in November 1978, amended Proposition 13 to reflect declines in value. As a result, Revenue & Taxation Code Section 51 requires the Assessor to annually enroll either a property’s Proposition 13 factored base year value, or its Market Value as of January 1, (taking into account any factors causing a decline in value), whichever is less.

Prop 8 reductions in value are TEMPORARY reductions which recognize the fact that the current market value of a property has fallen below its current (Prop 13) assessed value. Once a Prop 8 value has been enrolled, a property’s value must be annually reappraised to determine whether its then current market value is less than its Prop 13 factored base year value.

When and if the market value of the previously reduced assessment ( Prop. 8 ) increases above its Prop 13 factored base year value, the Assessor will once again enroll its Prop 13 factored base year value. Prop 8 values can change from year to year as the market fluctuates up and down, but in no case may a value higher than a property’s Prop 13 factored base year value be enrolled.

If you think your property is being taxed on a value that is higher than its current market value, submit a Prop 8 temporary relief form or contact the Assessor’s Office, and ask for a review form. Assessment Review Requests should be submitted to the Assessor’s Office by June 15, and no later than September 15, of the current assessment year.

Important Points

• The Assessor can only consider the market value of your property as of the lien date (January 1st).
• The market value of your property will be determined by analyzing sales of comparable properties in the area.
• Properties with characteristics similar to yours must have sold for less than your current assessed value.
• Supplemental Assessments will not be revised due to Proposition 8 reviews.

*Base year value/inflationary factor: The value established as of the date of acquisition and/or completion of new construction. This value is adjusted each year by an inflationary factor. The inflationary factor is the lesser of 2% or the California Consumer Price Index (CCPI) rate.

An Example of how it works:

Let’s say you bought a home several years ago for $100,000. The Assessor determined that the purchase price was the fair market value, so the new base year value of the property was set at $100,000.

Over the next year, real estate values increased by 10% and you could sell your home for $110,000. That’s good, you acquired $10,000 in equity. Even though the market value increased by 10%, the factored base year value could only increase 2% to $102,000, because of the limits set by Prop. 13. The Assessor compares the market value to the factored base year value, and enrolls the lesser of the two. The assessed value is $102,000.

The real estate market continued to grow, and property values in Santa Clara increased another 10% the following year. Last year you could have sold your home for $110,000, this year you could sell it for $11,000 more, or $121,000. But your Prop. 13 factored base year value was considerably less. Last year’s value of $102,000 plus 2% gives you a new factored base year value of $104,040. The Assessor again compares the two values, and enrolls the lowest one. This year’s assessed value is $104,040.

You can see in this example, after 2 years the difference between the market value and the assessed value is $16,960! Proposition 13 protected you from unpredictable increases in property taxes because the assessed value was based on factored base year value, not market value.

But what happens if the market value goes down? Proposition 8 allows the Assessor to temporarily reduce the assessed value of property if the market value is lower than the factored base year value. This is exactly what happened a few years ago to many property owners in Santa Clara. As a result the Assessor temporarily reduced the assessed value of over 100,000 parcels.

Let’s go back to our example and say the market dropped 20%, and you could only sell your home for $96,800. At the same time, the last factored base year value of $104,040 is increased by 2% to $106,120. The Assessor compares the two values and sees that the market value is lower. The property receives a temporary reduction because of Prop. 8, and the assessed value drops from $104,040 to $96,800.

When the real estate market rebounds, market values of many properties are once again higher than their factored base year values. As a result, the Assessor is returning many parcels to the value limits set by Prop. 13. That means that if you received a temporary reduction in the past, you could see what looks like a greater than 2% increase in the assessed value this year.

Here’s what’s happening; the temporary relief that Prop. 8 gave you due to the depressed real estate market is now over and the assessed value is returning to the limits set by Prop. 13. In many cases, the assessed value is still much lower than the current market value of the property.

Back to our example, suppose the market jumps 30% in one year and you could sell your home for $125,840. The factored base year value is increased by 2% from $106,120 to $108,242. Now the factored base year value is lower than the market value, so the Assessor enrolls an assessed value of $108,242. Your assessed value goes up from $96,800 last year to $108,242 this year. You are again receiving the benefits of Prop. 13, and your assessed value is $17,598 lower than the market value.

Can the Assessor increase your assessed value more than 2% in one year? Yes, your assessed value can go up more than 2% in one year if you received a temporary (Prop. 8) reduction in the previous year, but it cannot go higher than the factored base year value which is limited to increases of no more than 2% per year.

Your situation may be different, and the Assessor’s staff is ready to help you understand the assessed value of your property. If you have any questions, or think that the market value of your home is lower than the new assessed value on the value notice mailed in May, contact the Assessor’s Office.

Additional Information:

• Proposition 8 Decline in Value Request Form
• Formal Assessment Appeals, Clerk of the Board

Similar Posts:

• How Santa Clara County Proposition 13 Works
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By Bob Willis in Washington bwillis@bloomberg.net.

Jan. 6 (Bloomberg) — Fewer Americans signed contracts to buy previously owned homes in November as credit markets seized up and a deteriorating labor market signaled the housing slump will extend into a fourth year.

The index of pending home resales fell 4 percent to 82.3, the lowest level since the series began in 2001, from a revised 85.7 in October, the National Association of Realtors said in a report today in Washington. Pending sales fell in all four regions.

A financial crisis that worsened in the final months of 2008 deepened the economic recession, extending the slump in home sales and prices. President-elect Barack Obama has pledged to enact measures to ease foreclosures and save or create 3 million jobs to boost the economy.

The numbers were “certainly affected by the credit crunch,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said before the report. “You won’t see home sales bottoming until prices adjust further. We’re no where near the bottom.”

Economists expected pending sales to fall 1 percent after an originally reported drop of 0.7 percent in the prior month, according to the median forecast of 34 economists in a Bloomberg News survey. Estimates ranged from a drop of 5 percent to a gain of 1.5 percent.

Today’s home-sales report showed declines of 7.2 percent in the Northeast, 6.7 percent in the Midwest and 2.4 percent in the West. Pending sales fell 2.2 percent in the South.

Year-Over-Year

The Realtors group, whose pending sales data go back to January 2001, started publishing the index in March 2005. The gauge was down 5.3 percent from November 2007.

Pending resales are considered a leading indicator because they track contract signings. Closings, which typically occur a month or two later, are tallied in the Realtors’ monthly existing-home sales report. That report for November is scheduled to be released Jan. 26.

The financial and credit market collapse that intensified in September stifled a housing market that had been showing some signs of stabilization.

Purchases of previously owned homes, which account for about 90 percent of the market, fell 8.6 percent in November from the prior month and median prices fell 13 percent from a year earlier, the biggest decline on record. November sales of new homes, which account for the remainder, dropped to the lowest level in 17 years.

Late Payments

One in 10 Americans fell behind on mortgage payments or were in foreclosure in the third quarter, the Mortgage Bankers Association reported last month. The share of mortgages 30 days or more overdue and the share of loans already in foreclosure both jumped to all-time highs in a survey that goes back 29 years, the association said.

With the economy gripped by a recession, average house prices have fallen by about a quarter from their peaks in mid- 2006, according to the S&P/Case-Shiller home price index.

Builders are shell-shocked. Lennar Corp., a U.S. home construction company that builds in 14 states, on Dec. 18 reported its seventh straight quarterly loss.

“We’re in the midst of a downward spiral and the momentum is building,” Chief Executive Officer Stuart Miller said on a conference call with analysts.Similar Posts:

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3424 Notre Dame Dr.

SAnta Clara, CA 95051

This was a fun project to work on. I want to thank the owner, Mr. Benson for giving me the opportunity to revitalize this beautiful home in one of Santa Clara’s prized neighborhoods. Together with the contractor, HVP Design, we created a rich contemporary feel and open design. We also incorporated some smart “green” elements such as adding exterior wall insulation, new electrical wiring, special lighting sensors and timers, and CFL lighting throughout the home to save on electricity and produce a smaller carbon footprint. After three months of work and the result was amazing, let me know what you think.Similar Posts:

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This is my first post on my brand new Blog, Santa Clara Valley Living. This blog is dedicated to serving the communities and residents of the Santa Clara Valley. I hope you find this blog entertaining and enlightening. I am committed to providing my readers insightful real estate information. Best wishes to you all on a great 2009.Similar Posts:

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