June 9, 2020
All Real Estate News
IndieDwell, an Idaho company, is taking metal shipping containers and creating homes. After walking through a 640 square foot, 2-bedroom shipping container home Housing and Urban Development (HUD) Secretary Ben Carson said, “This is transformative, and it looks like a small site-built home. It’s been done very well and (there’s) a lot of creativity involved here.” IndieDwell can manufacture a two-bedroom home for $85,000 – far less than a traditionally built home.
That means someone earning about $37,000 or $36,000 could afford this… So you’re accumulating value, allowing this to be sort of a first step, particularly for young people who might want to move up to something more substantial… You’re not just throwing money away, in terms of rent. You’re accumulating equity… The reason houses are that expensive is supply and demand… If we can increase the supply with houses like this, demand goes down and prices stabilize.
Ben Carson, Housing and Urban Development (HUD) Secretary
Unlike manufactured homes that will lose value over time, these shipping container homes will maintain their value just as a site-built home would.
Carson said that wealth accumulation in the United States is mostly based on homeownership, where the average net worth of a renter is $5,000, and the average net worth of a homeowner is $200,000.
In addition, due to their increased efficiency and better heating and cooling systems, shipping container homes have lower monthly utility bills. Interest in these types of homes is spreading across the country, and you can even find a few companies here in Tallahassee, Florida who can manufacture these for you!
So… we always recommend speaking with a tax specialist, but there are some ways the sale of your home might qualify for tax deductions or exemptions! There’s also a new tax code, the Tax Cuts and Jobs Act, which is causing quite confusion. So here is a run down of what may be possible:
1. Selling Costs: These costs must be tied directly to the sale of the home. You must have also lived in that home for at least 2 of the preceding 5 years. In addition, the home must be your principal residence, and not an investment property. “You can deduct any costs associated with selling the home-including legal fees, escrow fees, advertising costs, and real estate agent commissions,” says Joshua Zimmelman, the President of Westwood Tax and Consulting. This could also include home staging fees, according to Thomas J. Williams, a tax accountant who operates Your Small Biz Accountant in Kissimmee, Florida. Be mindful that you cannot deduct these expenses in the same way you would mortgage interest. If you qualify, you would essentially subtract the costs from your sales price, which would positively affect your capital gains tax.
2. Home Improvements and Repairs: If you renovated your home in order to make it more marketable, you may also be able to deduct the costs of the upgrades. This may include new paint, roofing repairs, and water heaters. The catch here is that, “If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing,” says Zimmelman.
3. Property Taxes: This deduction is still allowed, but your total deductions are capped at $10,000, Zimmelman says. If property taxes were paid up to the point at which the home was sold, you may be able to deduct the amount you paid in property taxes (up to $10,000).
4. Mortgage Interest: Similar to property taxes, you may also be able to deduct the mortgage interest for the portion of the year you owned the home (up to $750,000 in mortgage debt, or $1 million if the home was purchased before 12/15/2017). Both mortgage interest and property taxes are itemized deductions, which need to be greater than the new standard deduction ($12,200 for individuals, $18,350 for heads of household, and $24,400 for filing jointly).
5. Capital Gains: Capital gains is more of an exclusion than a deduction. It is essentially the profit from the sale (after expenses and outstanding mortgage debt). The profits are taxed as income, but you may be able to exclude $250,000 if you are single, and $500,000 if married if you lived in the home for at least 2 of the previous 5 years. Please keep an eye out on this one, as future tax bill threatens to change the rules. One of the changes being discussed is having to live in the home 5 of the past 8 years, rather than 2 out of the past 5 years.
About 25% of the United States population lives within a homeowners association (HOA), according to the Foundation for Community Association Research. There are about 350,000 community associations among the over 70 million U.S. residents. A main duty of an HOA includes the maintenance of common property through fees or dues.
Pros of an HOA
Cons of an HOA
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