Michigan Principal Residence Exemptions (PRE)

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Michigan Senate Moves Bill to Allow for Principal Residence Exemptions (PRE) Until June 30th

Over the past several weeks Michigan Realtors® has worked with the Legislature and the Department of Treasury to allow additional time for buyers to file their Principal Residence Exemption (PRE) for 2020. With the traditional deadline expiring this past Monday, June 1st, Michigan Realtors® is urging expedited movement on this important legislation to provide buyers with property tax relief and the greatest amount of certainty during the month of June.

Today, the Michigan Senate passed Senate Bill 940, sponsored by Senator Roger Victory (R- Hudsonville) extending the time frame to file a 2020 PRE until June 30th. With the overwhelming support of the Senate and work with the Department of Treasury, it is anticipated that the bill will see continued movement in the Michigan House next week.

While there are no certainties, Realtors® should advise their buyer closing in the month of June to file their PRE before June 30th in order to receive the PRE rate for their July property tax bill.

What is a Principal Residence Exemption (PRE)?

A PRE exempts a principal residence from the tax levied by a local school district for school operating purposes up to 18 mills. To qualify for a PRE on a parcel of land, a person must be a Michigan resident who owns and occupies the property as a principal residence. The PRE is a separate program from the Homestead Property Tax Credit, which is filed annually with your Michigan Individual Income Tax Return.

What this means to a homebuyer: If you close on a property in the month of June and file for the Michigan Principal Residence Exemption by June 30th, your summer tax bill will be lower due to the PRE.

Have questions about this subject, or any other real estate related topics, I’m always available to talk with you!

Dani

The Overlooked Financial Advantages of Homeownership

The Overlooked Financial Advantages of Homeownership | MyKCM

There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.

1. You Won’t Always Have a Monthly Housing Payment

According to a recent article by the National Association of Realtors (NAR):

“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”

As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Homeownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of homeownership. The same piece states:

“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third item noted in the article is how monthly costs become more predictable with homeownership:

As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”

With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying a home sooner rather than later is right for you.

Ready to start looking for a new home? Begin your search at https://nexthomevictors.realgeeks.com/dani-hallsell/ .  Have a real estate related question? Call, text or email me; I answer questions for free!

Dani

How Property Taxes Can Impact Your Mortgage Payment

How Property Taxes Can Impact Your Mortgage Payment | MyKCM

When buying a home, taxes are one of the expenses that can make a significant difference in your monthly payment. Do you know how much you might pay for property taxes in your state or local area?

When applying for a mortgage, you’ll see one of two acronyms in your paperwork – P&I or PITI – depending on how you’re including your taxes in your mortgage payment.

P&I stands for Principal and Interest, and both are parts of your monthly mortgage payment that go toward paying off the loan you borrow. PITI stands for Principal, Interest, Taxes, and Insurance, and they’re all important factors to calculate when you want to determine exactly what the cost of your new home will be.

TaxRates.org defines property taxes as,

“A municipal tax levied by counties, cities, or special tax districts on most types of real estate – including homes, businesses, and parcels of land. The amount of property tax owed depends on the appraised fair market value of the property, as determined by the property tax assessor.”

This organization also provides a map showing annual property taxes by state (including the District of Columbia), from lowest to highest, as a percentage of median home value.How Property Taxes Can Impact Your Mortgage Payment | MyKCMThe top 5 states with the highest median property taxes are New Jersey, New Hampshire, Texas, Nebraska, and Wisconsin. The states with the lowest median property taxes are Louisiana, Hawaii, Alabama, and Delaware, followed by the District of Columbia.

Bottom Line

Depending on where you live, property taxes can have a big impact on your monthly payment. To make sure your estimated taxes will fall within your desired budget, let’s get together today to determine how the neighborhood or area you choose can make a difference in your overall costs when buying a home.

Thinking about buying a home? Download my free Buyers Guide, “Things to consider when buying a home”.

Dani