Vicky88

I think the cost of living is become a real issue for lower income people. SD has really taken off in the past 10 years, property prices soared 25% last year alone. There are a lot of tech companies here, so thru the boons years there were a lot of millionaires created by stock options. Affordable housing for those on fixed income, or lower wage earners such as teachers, police etc. is becoming more openly discussed.

We lived in Silicon Valley in 2000 and the situation was so bad there that there were people who were collected by van at 3.30 in the morning to be trucked to the area to do the more menial tasks as there was no way a gardener or maintenance man could live locally.

In the meantime I am also playing the lottery hoping to win. Think our lottery is about $36 million on Wednesday. All I have won so far since we have been here is $10 which is not enough for that deposit.

southcoast

If you win tonight...

Any chance of lending us a few bob?

How about $150,000, thats a nice round figure...

NC Penguin

----------------------
Try searching through the archives of the following newsgroups on BritishExpats-
The Lounge
US Immigration

I think somebody may have already posted a similar or identical question in the past year.



NC Penguin

ukemigrant

I was told by the financial person I spoke with, that you can avoid PMI by doing an 80%/20% split on your borrowing, that means you can put down any % you want - more or less. Going into more detail would be too wordy, but I had to ask this person about 5 times to get to the bottom of all the possible options that I could choose from, beyond a simple 30 yr fixed rate mortgage.

Check with your financial person and ask 'How can I avoid paying PMI, apart from putting 20% down?'

Sam.

Englishmum

Before looking at houses to buy, I was in Barnes & Noble and spotted the "Dummies Guide to Buying a House".

An excellent purchase, we found some valuable advice in it.

Basically, even if you don't have kids of school age, it is still a good idea if possible to buy a house in an excellent school district as house prices hold up well and you will recoup your investment when you move on ....just like in the UK where people pay more to live in good school catchment areas.

You can buy the book online no matter where you are currently in the world from www.amazon.com or the Borders or Barnes & Noble bookstore internet sites (not sure you would get one relevant to the US housing market if you bought it from amazon.co.uk!)

frrussre

In response to ukemigrant, yes you can use the 80/20% = 2 mortgages or 80/10/10% = 3 mortgages method. All very clever but can be much trickier if you do not easily qualify, i.e. new immigrant etc. Not all banks will do it & therefore not always best rates + points & closing fees.
reg. Frank R.

SJones30

Its nice to know you folks have the lottery....here in Arkansas we dont have the lottery, thanks to the christian coalition religious organisation, who has a strong vote...

....it doesnt help either that our govenor is a christian church leader. But it is rather ironic that we have horse racing which you can place bets on but there is NO gambling or Lottery, there are Casino's and Lottery in the surrounding states, Its a shame that Arkansas lets this revenue leave when some of it can be put towards education and other programs with in the state itself......SUCH A SHAME!!

AND also...i know this is no relevence to the post...but, are you guys allowed to buy Beer and Spirits on a Sunday...guess what?? we are not.

ukemigrant

Thanks for that advice. I'm in the process of applying for an 80/20 split and there have been no indications of refusal yet.

Fingers crossed.

Sam.

frrussre

yep, good luck.

The Banks are keen to lend, so thats always good news.
reg. Frank R.

frrussre

Interesting articlein New York Times Sunday, Feb 2nd.

You will need to signup http://www.nytimes.com/
Cookies need to be on.

YOUR HOME
Tax Rules on the Sale of a Home
By JAY ROMANO



This the link to the article.
http://www.nytimes.com/2003/02/02/re...te/02HOME.html

ukemigrant

Can you quote the text in a reply to this?

Then we can all see it without having to register....don't worry if you don't want to - won't be offended

Sam.

frrussre

Tax Rules on the Sale of a Home

LATE last year, the Internal Revenue Service issued regulations aimed at clarifying a 1997 law that allows taxpayers to exclude up to $500,000 in gain from the sale of a principal residence.

One set of regulations, made final on Dec. 24, 2002, addresses a number of issues that were somewhat unclear in the original law. Among these topics are how to determine if a home is a principal residence; when and how to allocate the gain between residential and business use of the property; how to apply the exclusion to joint owners who are not married; and how to fulfill the requirement that the owner use the home as a principal residence for two of the five years before the sale.

Another set of regulations, published on Dec. 24 but designated as temporary, identifies when a home that has been used as a principal residence for less than two years may qualify for a reduced exclusion of gain.

"People sometimes need help reading and applying a statute," said Joel E. Miller, a Queens tax lawyer. "And these regulations serve that purpose."

Mr. Miller said that while neither set of regulations substantively changes the original 1997 law, they do reflect an I.R.S. interpretation of that law that seems favorable to taxpayers.

Gary H. Schatsky, a Manhattan lawyer and financial consultant, said that before 1997, homeowners could defer paying tax on the gain resulting from the sale of their principal residence if, within two years of the sale, they purchased a new home for an equal or greater amount than the sale price of the old one. In addition, Mr. Schatsky said, the tax laws at the time allowed a once-in-a-lifetime exclusion of up to $125,000 in gains for homeowners who were 55 and older when they sold their home.

The 1997 law was more generous to homeowners. It allows an individual taxpayer who owns and lives in a home for two out of the last five years to completely avoid paying taxes on up to $250,000 in gains and, in fact, to repeat the process every two years. Married taxpayers filing jointly, Mr. Schatsky said, can exclude up to $500,000 in gain.

"It was an extraordinary boon for people who have enjoyed significant increases in their property values," he said. "But the law left some questions unanswered."

For example, the 1997 law provided that a homeowner who did not meet the two-year requirement might be eligible for a partial exclusion if the homeowner had to sell the house because of health reasons, a change in the place of employment or, to the extent provided by I.R.S. regulations, "unforeseen circumstances." In other words, he said, the law left it up to the I.R.S to determine what would be considered an unforeseen circumstance.

Julian Block, a tax lawyer in Larchmont, N.Y., said that with the temporary regulations, the I.R.S. had identified various "safe harbors" that will automatically qualify a sale for a reduced exclusion.

For example, he said, taxpayers who sell their homes because their place of work has changed will automatically qualify for a reduced exclusion if a "qualified person's" new place of work is at least 50 miles farther from the old home than the old workplace was. A qualified person, Mr. Block said, includes the taxpayer, the taxpayer's spouse, a co-owner of the home or a member of the taxpayer's household.

The reduced exclusion, he said, is based upon the length of time the taxpayer owned and lived in the home before selling it. For example, a taxpayer who would be entitled to a $250,000 tax exclusion if he sold the home after two years will be entitled to a $125,000 exclusion if he sells it after one year and meets the requirements for the reduced exclusion.

In addition, Mr. Block said, the I.R.S. has said that a sale made for health reasons is eligible for a reduced exclusion if a qualified person — which includes close relatives — has a disease, illness or injury. "If a physician recommends the change in residence, that will be enough to satisfy the I.R.S.," he said.


Tax Rules on the Sale of a Home
(Page 2 of 2)



Finally, Mr. Block said, the I.R.S. has articulated what it considers to be "unforeseen circumstances" for purposes of qualifying for the partial exclusion. Such events include death, divorce or legal separation; becoming eligible for unemployment compensation; a change in employment that leaves the taxpayer unable to pay the mortgage or reasonable basic living expenses; and multiple births resulting from the same pregnancy. Such events, he said, must involve the taxpayer, a spouse, a co-owner or a member of the taxpayer's household.

Other unforeseen circumstances include damage to the residence resulting from a disaster caused either by nature or by humans, an act of war or terrorism or the condemnation, seizure or other involuntary loss of the property.

"And the regulations also give the director of the I.R.S. the discretion to identify other circumstances as unforeseen," Mr. Block said.

Mr. Miller, the Queens tax lawyer, said a taxpayer who has already filed a return reporting a gain from the sale of a principal residence but now realizes he or she qualifies for an exclusion can obtain the benefits of the exclusion by filing an amended return. In most cases, he said, returns can be amended for up to three years after the original due date.

In the recently published final regulations, Mr. Miller added, the I.R.S. addressed several issues that needed clarification.

For example, he said, for taxpayers with more than one home, relevant factors for determining which is the principal residence include the amount of time a home is used; the taxpayer's place of employment; the residence of other family members; the address used for tax returns, driver's license, car registration, voter registration and bills and correspondence; and the location of the taxpayer's banks, religious organizations and recreational clubs.

The final regulations also allow the home sale exclusion when the gain includes the sale of vacant land that has been used as part of the residence (provided the land sale occurs within two years of the sale of the residence) and indicate that a co-owner who files an individual return is entitled to an exclusion of up to $250,000, provided the other requirements of the law are met.

The regulations also explain how the two-year personal use and ownership time periods are calculated. For example, Mr. Miller said, the two-year ownership and use periods need not be concurrent. That means that someone who lives in a home for two years before buying it and who then moves out of the home after buying it but does not sell for it another two years will have met the requirements of the law.

And the two-year period itself, he said, can consist of 24 consecutive months, 730 individual days or any other variation equaling two years, provided that the two years of residence occurs within the five years before the sale. Short absences like vacations, he said, would count as periods of use while longer absences — such as a one-year sabbatical — would not.

Finally, Mr. Miller said, the I.R.S. has relaxed the rules on business use of the home. He explained that whenever a taxpayer uses a portion of a home exclusively for business purposes and takes a tax deduction for that use, the cost basis of that portion of the house is reduced by the amount of the depreciation deduction allowed or allowable.

Under the former rules for excluding gain on the sale of a house, whenever a home office was involved, the taxpayer would basically report two separate sales: one for the residential portion of the house and the other for the business portion. And while the gain on the residential portion might qualify for the exclusion, the gain on the business portion would not.

Under the final regulations, however, if the business use of the home occurred within the same dwelling unit as the residential use, the taxpayer does not need to allocate the gain between the business and residential use.

And while in most cases a taxpayer who realizes a gain will be subject to tax on any depreciation deductions taken on the business portion of the home after May 6, 1997, he or she will be entitled to exclude any amount above that up to the maximum allowable exclusion.

jinjimbob

This is for federal, there are states and county taxes too.

frrussre

jinjimbob,
What taxes local/State/County are you talking about? This thread is about Federal Capital Gains on the sale of your foreign property. Are you referring to Transfer taxes.
Reg. Frank R.

southcoast

Actually I started this post asking if you could buy a house if not yet a resident...

The answer is YES...I am closing very soon.

This forum question has spiralled into some other bunch of mumbo jumbo....

Lets keep it simple, for us Brits that what relative answers...

Thanks...

(from a simple simplton Dorset lad)