Be prepared for tax season: Understanding the Michigan Homestead Property Tax Credit

There's always a lot of talk with regard to property taxes in the state of Michigan, and one area that can be a bit confusing to folks — especially first time homebuyers — is the Homestead Property Tax Credit (HPTC). 

The HPTC is a way to offset the cost of the property taxes on your home in the state of Michigan. Not every property qualifies. In order to be able to claim this tax credit, the property that you were filing it on must be your permanent home in Michigan and used as a principal residence (or homestead) and you must be a resident of the state for at least six months. Other criteria also apply.

 

Filing for a Homestead Property Tax Credit is easy: you simply submit the Homestead Property Tax Credit Form (MI-1049CR) along with your Michigan Individual Tax Return (MI-1040). (If you are not required to file a MI-1040, the HPTC may be filed on it's own by April 15.) Alternate forms are used by eligible veterans or their surviving spouses, active-duty military and those who are blind. 

When you purchase a home intended to be your principal residence in Michigan, another form, a Principal Residence Exemption (PRE) Affidavit, is filed the with local assessor in the municipality where the property is located. The PRE Affidavit is separate from the HPTC and can be filed by the title company that handles the closing (or the new owner can do it on their own). More details on that can be found by clicking here. 

It seems important to note that during the process of looking for a home to purchase, the property tax amount on some homes may reflect an amount that is higher then comparable properties that you've seen. That may be due to the possibility that the current owner uses it as an income property. 

For more, including how qualified health insurance premiums and other criteria may affect the Homestead Property Tax Credit, click here. 

Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403. 

Interest rates stable for now, but what does the possibility of an increase in mortgage interest rates mean for you in 2015?

Interest rates are at a historic low, and in a recent press conference, Federal Reserve chair Janet Yellen indicated that the Fed may not raise interest rates until later this year, possibly sometime in the summer.

Interest rates were cut to almost zero in December 2008, and an effort has been made to keep rates low in hopes of stimulating the economy. 

Any change in policy would be dependent on economic data of course. 

You might be wondering what all this has to do with you. In truth, interest rates affect everyone of us, but they are of special importance to potential homebuyers (and those wishing to refinance, for that matter). 

Quite simply, lower interest rate means less money paid out by the borrower to the institution lending the money, especially over the long-term. 

I decided to do a quick calculation of what one might borrow for a mortgage, say $250,000, so I logged onto mortgagecalculator.com. You can do the same and play around with some numbers.

As is illustrated with my plugging in $250,000, one half of a percent can be significant.

Borrowing $250,000 over a 30-year period at 4.5% can save over $27,000 (this does not include points, closing costs, etc., however) over the same loan borrowed at 5%. 

As you can see, a seemingly small difference in interest rate can save, well, a lot of your hard earned money. 

When it comes to mortgages, it does pay to shop around and know your options. But one thing is certain: with the Fed possibly raising interest rates sometime in 2015, it is smarter to purchase sooner, rather than later. 

Below is the news conference from mid-December. Yellen's remarks about interest rates can be viewed at about the 30:00 mark. 

   
Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403. 

Natural beauty roads are a hidden gem in Washtenaw County

Washtenaw County is a great place to live, and no matter one's lifestyle, there is something to suit everyone. From city life in the heart of Ann Arbor to the outer reaches of town that yield pastoral settings and everything in between, one thing that tends to stand out are the natural beauty roads.  
 

At current count, there are nine interspersed throughout the county and they're not only peaceful and stunning areas to live, they're great for outdoor activities like biking or running. Lined with mature trees, graceful curves and hills, these unique areas never disappoint.

(Click here for a map) 

•Gale Rd. (Superior Township) 

•Warren Rd. (Superior Township)

•Napier Rd. (Superior Township)

•Tubbs Rd. (Ann Arbor)

•Mahrle Rd. (Manchester)

•Marshall Rd. (Dexter)

•Scully Rd. (Dexter)

•Riker Rd. (Chelsea)

•Strawberry Lake Rd. (Dexter)

Not every road can be distinguished as a natural beauty road. The process begins with a petition being filed with the township where the road is located and takes many things into consideration, but generally so long as the road meets the established minimum criteria including traffic volume guidelines, development and the existing function of the road it can happen.

The purpose of the natural beauty roads program is to highlight the natural essence of county roads that have a unique quality to them — attributes including native vegetation like wildflowers, grasses, shrubs, open areas — and these roads are maintained with standards established by Washtenaw County that were designed specifically for natural beauty roads.

Click here for more on designation and maintenance guidelines for these roads, which are located not only in Washtenaw County, but throughout the state of Michigan. 

Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403. 

Report indicates that Ann Arbor area needs 3137 new affordable housing units within 20 years

According to a report by Virginia-based urban planning and neighborhood development consulting firm czb LLC, the housing market in Washtenaw County is in pretty good shape.

That's not to say that it can't be better.

One fact that has been stated in the 55 page report is the lack of affordable housing units — non-student housing, more specifically — in Ann Arbor. 

Conversely, the concentration of affordable housing is located in Ypsilanti. 

The report make some suggestions to improve the housing market countywide, but one is to have Ann Arbor add over 3000 affordable housing units over the next 20 years: 2787 of those in the city of Ann Arbor and 350 in Pittsfield Township. 

Countywide, there is no doubt that the market has found a sense of stability in most respects, with renters and buyers both having viable choices. (That said, there are fewer properties available for those who rent — and rent prices are rising.)

But with regard to the housing markets in Ann Arbor and Ypsilanti, the report points out there is a disparity between the two: Ann Arbor, with it's rather sturdy foundation fueled by households that are more highly educated and have the ability for upward mobility, while Ypsilanti and Ypsilanti Township bear a higher number of homes that have suffered the scars of negative equity, along with households that are on the financial brink.

Some argue that this is a jobs issue, while others say, as the report points out, that it is more of a policy issue. Further, it continues, the two markets are expected to continue moving in opposite directions unless a considerable change in policy is made. 

If not, one could expect:

• Some workers in Ann Arbor will not be able to continue to live there as housing costs will rise faster than wages, resulting in the need to commute, which has its own drawbacks.

• In the short-term, Ann Arbor will become less affordable to non-student renters, and down the road, to many buyers.

• Ypsilanti, saddled with falling property values and families who are struggling financially, will be even more affordable and the only viable option for those who were priced out in the surrounding area. 

The report (click here to read) was commissioned by the Washtenaw County Office of Community and Economic Development and funded by the U.S. Department of Housing and Urban Development, Washtenaw County, the city of Ann Arbor and the Ann Arbor Downtown Development Authority.

Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403. 

Great tips for selling your home in the winter season!

Are you thinking of getting a head start before the spring competition? This is not a bad idea just look at the tips below before putting your home on the market! Call Chris at 734-730-3403  for a free market analysis and sell your home before the spring!



Winter Selling Wonderland - KW Blog