Please give me suggestion (Laguna Niguel, Aliso Viejo: sales, real estate, rental)

[SLAMG]

Hello everybody I am a new immigrant. I am ready to buy a house. The first factor I considered is the climate, I hate the cold winter, so I prefer California, Texas and Florida.

One of my friends(she is from Utah) told me not to be optimistic about the security situation in Florida, where people are not very friendly to foreign population, while California's prices are too high, finally, I decided to San Antonio, Texas , But they told me the winter will be snow in Texas. To be honest, I hope to settle down in California, before I make a final decision, anyone can tell me what the position of California's relatively lower housing prices？ My budget is about 200 thousand U.S. dollars

After selection of two weeks, I spotted one built in the 90's house price 220,000 U.S. dollars(this house is in texas)
In addition to insurance and the annual repair cost, and each year I have to pay duty on house prices of 1.5%

Here I have some quastions.

1. The housing tax is collected in accordance with housing prices, and if I buy a house on a person's contract price of less than 220,000, say 150,000, the rest of the 70,000 I will supply homeowners in other ways, in fact, I have to pay the landlord the actual price is still 220,000. I want to know the legality of such acts, or may reasonably be regarded as tax avoidance.

2. If this building's original price is 140,000, plus decoration, furniture and electrical appliances, finally together is 220,000, then I going to pay an extra tax on housing each year because of the furniture and electrical appliances, which sounds absurd.
If the government in accordance with the housing area to collect taxes, then I think that would be more reasonable, rather than just looking at the transaction price of housing.

Dont laugh at me,Cause i m really a rookie in this country

Please give me some advice
Thank you

[Charles]

Originally Posted by SLAMG

Hello everybody I am a new immigrant. I am ready to buy a house. The first factor I considered is the climate, I hate the cold winter, so I prefer California, Texas and Florida.

One of my friends(she is from Utah) told me not to be optimistic about the security situation in Florida, where people are not very friendly to foreign population, while California's prices are too high, finally, I decided to San Antonio, Texas , But they told me the winter will be snow in Texas. To be honest, I hope to settle down in California, before I make a final decision, anyone can tell me what the position of California's relatively lower housing prices？ My budget is about 200 thousand U.S. dollars

After selection of two weeks, I spotted one built in the 90's house price 220,000 U.S. dollars(this house is in texas)
In addition to insurance and the annual repair cost, and each year I have to pay duty on house prices of 1.5%

Here I have some quastions.

1. The housing tax is collected in accordance with housing prices, and if I buy a house on a person's contract price of less than 220,000, say 150,000, the rest of the 70,000 I will supply homeowners in other ways, in fact, I have to pay the landlord the actual price is still 220,000. I want to know the legality of such acts, or may reasonably be regarded as tax avoidance.

2. If this building's original price is 140,000, plus decoration, furniture and electrical appliances, finally together is 220,000, then I going to pay an extra tax on housing each year because of the furniture and electrical appliances, which sounds absurd.
If the government in accordance with the housing area to collect taxes, then I think that would be more reasonable, rather than just looking at the transaction price of housing.

Dont laugh at me,Cause i m really a rookie in this country

Please give me some advice
Thank you

Different states have different ways of computing property tax. Theoretically the method described above might work in California as the property tax is based on the sales price and can only increase a slight amount (3%???) each year because of Proposition 13. There's got to be a way the county/state prevents people from working a loophole like this. I just don't know.

Other states might have a means of computing property tax on assessed values regardless of sales price - I don't know.

For example, here are three homes in California that sold for much less than neighboring homes sold for. Normally, homes in these neighborhoods sell for $700K-$800K. I'd me curious myself as to what the property taxes will be on these homes.

Ladera Ranch for $10K???
http://www.redfin.com/CA/Ladera-Ranc...4/home/5963289

Laguna Niguel, 3500 sqft feet for $135K???
http://www.redfin.com/CA/Laguna-Nigu...7/home/4932026

Aliso Viejo for $25K???
http://www.redfin.com/CA/Aliso-Viejo...6/home/4872206

[Ultrarunner]

Originally Posted by Charles

Different states have different ways of computing property tax. Theoretically the method described above might work in California as the property tax is based on the sales price and can only increase a slight amount (3%???) each year because of Proposition 13. There's got to be a way the county/state prevents people from working a loophole like this. I just don't know.

Other states might have a means of computing property tax on assessed values regardless of sales price - I don't know.

For example, here are three homes in California that sold for much less than neighboring homes sold for. Normally, homes in these neighborhoods sell for $700K-$800K. I'd me curious myself as to what the property taxes will be on these homes.

Ladera Ranch for $10K???
http://www.redfin.com/CA/Ladera-Ranc...4/home/5963289

Laguna Niguel, 3500 sqft feet for $135K???
http://www.redfin.com/CA/Laguna-Nigu...7/home/4932026

Aliso Viejo for $25K???
http://www.redfin.com/CA/Aliso-Viejo...6/home/4872206

Need to add that Assessed Value is the Fair Market Value at the time of transfer... The Sales Price is not the final word although, in many cases with a home sold conventionally through the MLS and Brokerage it is.

I have bought several distressed properties and in every case the purchase price was NOT accepted by the County Assessor... to wanted to make you aware of that.

[SLAMG]

Thanks for your answer...............you mean a few people take advantage of the loophole to avoid taxes in California？
For some owner of luxurious masion,i can understood them.....

[Charles]

Originally Posted by Ultrarunner

Need to add that Assessed Value is the Fair Market Value at the time of transfer... The Sales Price is not the final word although, in many cases with a home sold conventionally through the MLS and Brokerage it is.

I have bought several distressed properties and in every case the purchase price was NOT accepted by the County Assessor... to wanted to make you aware of that.

I sort of figured this was the case. Now my interest is piqued.

How is the fair market value computed? Under what circumstances does the assessor base property tax on a fair market value computation rather than the sales price?

[Ultrarunner]

Originally Posted by Charles

I sort of figured this was the case. Now my interest is piqued.

How is the fair market value computed? Under what circumstances does the assessor base property tax on a fair market value computation rather than the sales price?

In my county it starts with a "Golden Rod" report of sale form submitted at the time of recording.

The form has about 20 questions asking detailed information about the transaction, relationship between the buyer and seller and property condition.

The information used is the starting point for the Assessor to begin making a determination of value. I've had assessor staff make mulitple visits to properties I've bought... sometime many months apart.

Here's a couple of key items...

Was the property listed on the Multiple Listing Service?

Provide detailed finance information such as loan type and terms or if it is a cash sale.

Describe Property Condition...

I bought one home at a substantial discount due to a $40k termite report... the Assessor disallowed the termite report at first... I had to argue and prove I had no intention of ever doing the work and if and when I sold, I would not realize top dollar because the work would still be required...

If you pay a high interest rate on your loan, the assessor will say the property was under-priced... if you pay a low interest rate, as in seller financing, the assessor may claim you may have overpaid because the financing made it attractive.

A big one is how the property was marketed... properties that are advertised and on the market for a while generally are not challenged... Almost every one of my purchases has been followed up with an Assessor call to the Real Estate Agents...

Properties classified as "Distress Sales" are often the most scrutinized because most people don't have the ability to purchase and many are not highly advertised... in other words your chances of getting a "Good" below Market deal are greater because of timing and ability.

[ferretkona]

Originally Posted by SLAMG

1. The housing tax is collected in accordance with housing prices, and if I buy a house on a person's contract price of less than 220,000, say 150,000, the rest of the 70,000 I will supply homeowners in other ways, in fact, I have to pay the landlord the actual price is still 220,000. I want to know the legality of such acts, or may reasonably be regarded as tax avoidance.

2. If this building's original price is 140,000, plus decoration, furniture and electrical appliances, finally together is 220,000, then I going to pay an extra tax on housing each year because of the furniture and electrical appliances, which sounds absurd.
If the government in accordance with the housing area to collect taxes, then I think that would be more reasonable, rather than just looking at the transaction price of housing.

Well #1 would be tax fraud not a loop hole. You will have to have a realtor guide you thru this if allowed.
#2 doesn't apply in CA. We have a 1% property tax paid yearly(bi-yearly is optional). Automobiles are taxed yearly as well and added to registration. We do not have a tax on furnishings, appliances. I am aware that many other states tax differently.

[Ultrarunner]

Originally Posted by ferretkona

#2 doesn't apply in CA. We have a 1% property tax paid yearly(bi-yearly is optional). Automobiles are taxed yearly as well and added to registration. We do not have a tax on furnishings, appliances. I am aware that many other states tax differently.

Personal Business Property is still taxed... I had a line item on my property tax listing gas range and a $2.50 tax on a rental I owned in California.

I believe it is no longer in effect except on commercial type property... the facility where I work has a substantial personal property tax component in addition to property tax.