Township Adopts New Budget With Lower Real Estate Tax Rate

The township was forced to lower the real estate tax rate due to the new Allegheny County assessments. UPPER ST. CLAIR, PA -- Upper St. Clair commissioners approved a new budget for 2013 that "holds the line" on taxes. The budget lowers the real estate tax rate from 4.6 percent to 3.9 percent due to the Allegheny County's new property assessments. There is a Pennsylvania law in place that requires millage rates to be adjusted so that the township does not reap a windfall from the new values. According to the most current information, the township's assessed value will rise by an estimated 18 percent in 2013. Therefore, if your property assessment went up more than 18 percent, your township taxes will likely increase in 2013. If your reassessment went down or remained the same, your taxes will likely decrease. Real estate tax bills will be mailed to taxpayers on May 1, 2013. The income tax rate will remain at .8 percent, the sanitary sewer multiplier will remain at 2.19 and the local services tax will remain $52/year. Commissioners unanimously approved the budget Monday night, however, Commissioner Glenn Dandoy said he did "reluctantly." He said he thought the budget for the library department was too expensive. Director of Finance August Stache told commissioners he expected the final budget would be posted on the township website by the end of the year.

Town of Riga maintains 0 percent property tax rate

Greece, NY -- Residents of the Town of Riga will, once again, pay no property taxes under next year's budget. Town residents pay no property tax because revenues exceed Riga's expenses, according to Supervisor Bob Ottley. "It has been this way since 2005 and should continue for many years — provided costs are controlled," he said. The spending plan, approved last month, includes $2,755,477 of expenditures, excluding the special districts, like water and sewer. That's an 8 percent increase in spending over this year, which Ottley attributes to the addition of $192,000 for capital projects and road repairs, which is 9 percent more than this year. Excluding the capital projects, spending decreased nearly 1 percent, he said. "The town department heads and their staff worked hard at controlling costs and presenting well thought out plans on how to efficiently continue to provide and improve on the services that we offer," Ottley said. The savings are a result of outsourcing dog control and kennel services, using private contractors for mowing and cleaning services, and controlling operational costs, according to the supervisor. Additional savings are coming from an extension of the life cycle of some of our bigger trucks in the highway department, as well as an aggressive replacement policy on some of the heavy pieces of equipment used in highway maintenance. Costs for health care insurance premiums are expected to rise by nearly 17 percent next year; there is no change in either the benefit plan or the percentage of contribution that the Town of Riga will make to these plans for full-time employees. The town's contribution for New York State retirement is also expected to increase — a fee mandated by the state, Ottley noted. The budget includes a 2 percent raise for all Riga employees and elected officials will receive a 2 percent wage increase. The Newman Riga Library will receive a slight increase in funding while the Riga Cemetery will, for the first time, receive some monies from the town to offset operational costs. New dugouts also will be installed at the new baseball field at Sanford Road Park. The spending plan also designates funds for replacement of the front end loader, backhoe, and skid steer loader, as well as a purchase of a new brush chipper, which will be purchased and shared with the Village of Churchville. Two new capital projects for next year are to perform drainage improvements along Buffalo Road, west from the village to Dollar General; a sidewalk will also be installed there in 2014. The second project involves renovation work to make the kitchen area more accessible in the Raymond C. Adams Cobblestone Hall and replacing its sidewalk. "Our budget process was done very effectively and in a way that the entire board has a great understanding of where all of our monies are being spent and where our revenues are being generated," Ottley said.

Property tax bills going up

Massachusetts -- The Board of Aldermen has calculated property tax bills for fiscal 2013, which will result in a 2.3 percent increase for homeowners and a 4.7 percent increase for commercial/industrial property owners. On average, homeowner’s tax bills will increase by $119.01, to $5,212.39, and business owner’s bills will go up by $443.92, to an average of $9,728.55, according to data prepared by the city assessor’s office.

Facts and Fiction about the 3.8% 'Real Estate' Tax

All kinds of rumors have been swirling about what exactly is the 3.8% tax and how it will affect homeowners. Congress passed this tax in 2010 as part of President Obama’s health insurance and Medicare overhaul and is set to take effect January 1, 2013. The tax is estimated to bring in $210 billion in revenue over 10 years and is slated to go toward funding the Medicare Trust Fund. Although referred to as a real estate tax, in reality, it is a tax on “unearned” investment income for high earning taxpayers (individuals who have an Adjusted Gross Income (AGI) over $200,000 and couples filing a joint return with an AGI over $250,000 ($125,000 when filing separately)). Investment income includes interest, dividends, capital gains (less capital losses), and rental income (less expenses). Let’s start with what is NOT TRUE about the tax: • It is not a “sales tax” on home sales. • It is not an increase in the transfer tax on home sales. • It does not affect the exemptions already in place on the sale of primary residences when the gains are less than $250,000 for an individual and $500,000 for a married couple. • The mortgage interest deduction will not be eliminated for any taxpayers. What is TRUE about the tax? • Your AGI is calculated to include any investment income. • The tax applies to the LESSER of the investment income amount or the excess AGI over the $200,000/$250,000 limits. • The investment income will be subject to BOTH income tax AND the 3.8 percent Medicare tax. • For investors who own rental properties, the tax will apply to net rental income (gross rents minus interest on debt service, repairs, depreciation, and property taxes). • The rent from vacation properties that are rented for less than 14 days per year are not considered investment income. However, when a vacation property is sold, any gain is considered as investment income. • If your “sole occupation” is the ownership and management of investment properties, you are not subject to the tax. How about an example? A couple has lived in their home for 22 years and sells it for a capital gain of $540,000. Their earned income is $190,000 per year. While they would be subject to income tax on their total AGI of $230,000, no tax would be owed due to the 3.8 percent Medicare Tax. Earned income $190,000 Gain on sale of residence $540,000 Total taxable investment income $40,000 ($540,000 - $500,000) AGI $230,000 ($190,000 + $40,000) AGI threshold for couple $250,000 ($230,000 - $250,000 < 0) 3.8 percent Medicare tax owed $0 AGI is < $250,000; therefore, no tax is due. If the same couple’s earned income was $300,000, they would owe the 3.8 percent tax on $40,000 which is $1,520 in addition to income tax due on their AGI of $340,000. Earned income $300,000 Gain on sale of residence $540,000 Total taxable investment income $40,000 ($540,000 - $500,000) AGI $340,000 ($300,000 + $40,000) AGI threshold for couple $250,000 ($340,000 - $250,000 = $90,000) 3.8 percent Medicare tax owed $1,520 ($40,000 x 3.8 percent) AGI is $90,000 over the $250,000 limit, but the tax is assessed on only the taxable investment gain of $40,000. One more example: If an individual has an annual salary of $120,000 but makes $40,000 on net rental income, $10,000 on dividend income, and sold an investment property for net a $60,000 gain, he/she would be subject to the 3.8 percent tax on $30,000 which is $1,140 in addition to the income tax due on their AGI of $230,000. Earned income $120,000 Net rental income $40,000 Dividend income $10,000 Gain on sale of investment property $60,000 Total taxable investment income $110,000 ($40,000 + $10,000 + $60,000) AGI $230,000 ($120,000 + $110,000) AGI threshold for individual $200,000 ($230,000 - $200,000) 3.8% Medicare tax owed $1,140 ($30,000 x 3.8 percent) AGI is $30,000 over the $200,000 limit for an individual, so the tax is assessed on only the $30,000 not the full investment gain of $110,000. What is also TRUE about this tax? The tax was never introduced, debated, or reviewed until just prior to passage. A separate tax (0.9 percent on high earning taxpayers) is also being implemented against “earned” income to also help fund Medicare. The National Association of Realtors opposes these taxes.

Sandy victims still have to pony up for property taxes

NEW YORK - Unless Mayor Bloomberg and City Council realize there’s a problem and come to some agreement, City Hall won’t be giving any Sandy refugees a break on their January property tax bills. Property taxes are based on the building’s condition on the “taxable status” date of Jan. 5. If your home has disappeared and the Finance Dept. figures that out, you may get a tentative assessment on Jan. 15 that reflects just the land where it stood — and it would be up to you to file an application with the Tax Commission for a discussion about the remaining value of your sandy land. But when you rebuild, one expert advised that homes and small buildings will get a new and higher assessments. Home assessments will be based on about 6 percent of their construction costs, while four-to-ten unit buildings will have a new assessment based on 15 percent. “Their assessments have been low and capped for a long time, and now they will have a new starting point,” said the tax expert, who spoke on the condition of anonymity. Efforts to reach Finance were unsuccessful and a request to the Mayor’s office was not returned. *** In Breezy Point, where 111 small homes and cottages burned while surrounded by flood waters, a co-op corporation owns the land and collects taxes within the maintenance charges. According to Finance records, the co-op has a market value of $299,324,265 and an assessed value of $16,707,765 and has a yearly tax bill of $3.1 million. Roughly $775,000 is due Jan. 2. In the last two months, several properties have sold for amounts ranging from $320,000 to $640,000. Melissa Carrington, of Rockaway Properties, said one of her listings had to be taken off the market because the owner said it was now “unsellable.” *** Ofer Yardeni and Joel Seiden, of Stonehenge, have bought the apartment building at 103 E. 86th St., right off Park Avenue, for $76 million. The price equates to $1.575 million for each of the “huge” 48 apartments, or, as Yardeni said, $850 a square foot each of its 90,000 square feet. The three-, four- and five-bedroom apartments have fireplaces, and the five current vacancies will be gut-renovated and rented for $90 to $100 per foot, Yardeni said. “There are almost no luxury rental buildings left on the Upper East Side,” Yardeni noted, as most are being turned into condominiums. According to broker Aaron Jungreis, of Rosewood Realty, it didn’t take much effort to sell the off-market deal. “Ofer is very reliable, and it was a one phone call deal,” he said.

N.J.'s local tax bills keep spiraling upward

NEW JERSEY -- Ted Marvel pays $4,900 in annual property taxes on his 1,000-square-foot home in the heart of Collingswood. In fact, his monthly tax bill - $407 - is starting to rival what he pays in principal and interest on his mortgage. Said Marvel: "They're going to meet soon." In the new millennium, New Jersey's property taxes, the highest in the nation, are exploring new heights. "It's astronomical," said Marvel. "It's crazy." That, too, his Garden State neighbors affirm. Even as incomes have dropped (4.4 percent), and overall taxable value has fallen in a third of the towns, an Inquirer analysis showed that from 2000 to 2011, average tax bills in Burlington, Camden, and Gloucester Counties rose 44 percent. And that's adjusted for inflation. The average bill jumped from $3,964, to $5,691.