Proposed tax bills and real estate

I am going to limit my commentary to the part of the Federal tax bill that directly impacts real estate. For St. Paul homeowners the sky is probably not falling. Yes, the mortgage tax deduction is being limited to interest on the first 750K

The majority of mortgages are less than 750K and here in St. Paul where the median home value is around 200K most will not be affected by the changes in the MID.

The first 10,000 paid property and state taxes will also be deductible for those who qualify. Property taxes in St. Paul are 1.33% of the assessed value of the property. State income tax rates range from 5 to 10%. Most middle-income households are going to be in the 7 to 8%  range. [see the best run states]

With the standard deductions being raised fewer will qualify. Currently, there are many homeowners who do not get any tax benefit from owning a home because they do not itemize and the reason they do not itemize is that the standard deduction is higher than the total of all possible deductions added together.

The incentives for incurring more mortgage debt will be gone for some. It is even possible that owning lake homes in Minnesota will become less popular and the values will decline.

There are some advantages in having less mortgage debt. Money can be invested in other things. Maybe some will start a business rather than owning a lake home and take advantage of business tax cuts.

Most homeowners I know love owning a home but I think new tax laws will impact the housing market. Taxation has intended and unintended consequences. I think it is important to keep it all in perspective.

Is Winter what is used to be?

I wrote this in December of 2010. It was one of those winters when the snow banks were so high along the streets that it was hard to see if cars were coming when we tried to cross the street.

We ran out of places to put the snow once it was removed from the streets. Snow was hauled to the parking lot of the Sears store on University Avenue.  By the end of the season, there was a huge snow pile. I am not making this up, it took until July for the pile to completely melt.

I am not complaining but pointing out that the last real winter was about three years ago.

 

letitsnow wm
Mears Park – Downtown St. Paul

It has been snowing since midnight and it looks like this storm is going to be even bigger than #snowmageddon09 which really was overhyped as a storm.   I recall it dropped about a half foot of snow.  Some are calling this storm #snowmygod but I like #snowpocalypse as the national weather service is still predicting 12 to 16 inches in the Twin Cities.  I am thankful that it is Saturday.

frosts wm
W.A. Frosts on Selby Avenue

consider the roof rake

The first snow of the season is behind us and so is the second. The first snow kicks off the ice dam season. One of the best ways to prevent ice dams on roofs is to remove the snow before it has a chance to melt and freeze and turn into ice.

Yes, you can shovel your roof with a roof rake. They can be purchased at most building materials stores and they are not very expensive especially as compared to repairing water damage caused by water pooling on the roof because of the ice dams.

Now is a good time to buy a roof rake. They will sell out quickly if we get a big snow and they are considered seasonal which means they will be replaced by flower pots and seeds in late January or early February.

To learn about snow and ice dams go to the University of Minnesota Extension website and read up. Knowledge is power!

Related article Damn Ice Dams

 

Ice rake
roof rake

Minnesota is the best run state

MN state capital building
Minnesota State Capital

According to 24/7 Wall Street, Minnesota is the best-run state in America.

  • 2016 Unemployment: 3.9% (13th lowest)
  • Pension funded ratio: 79.8% (18th highest)
  •  Credit rating and outlook: Aa1/Stable
  • Poverty: 9.9% (6th lowest)

We have jobs with decent wages and more than 10,000 lakes. Yes, we pay state income taxes but we get a lot in return. We also have a beautiful newly renovated State Capital building.

Winter isn’t so bad if you dress for it. Spring, Summer, and Fall are amazing. We don’t have hurricanes and wildfires and earthquakes are rare. Mosquitoes are abundant but never in the winter.

It is time to get the shovel out

I walk a lot. I even walk outside when it is cold out. Weird I know but I have my reasons.

I was surprised when I walked to the grocery store last week and the sidewalk was covered with snow and ice, days after it had snowed. Some of the snow became ice after freezing and thawing a few times.

In fact, only about half of the properties along the way had snow-free sidewalks.

Saint Paul City Ordinance requires snow and ice to be removed from sidewalks within 24 hours; read Chapter 113and Chapter 114 of the Saint Paul Legislative Code for more information.

The city web site even has a “how to” section for people who do not know how to properly remove the snow from the walk.

There is also a  printable door hanger to take with you on your next walk. Leave the door hanger as a reminder to neighbors to keep their sidewalks clear.

To report a sidewalk that’s a safety hazard and needs shoveling, contact the Department of Safety and Inspections at 651-266-8989. 

The city will have the snow removed and send the bill to the property owner.

It is important to remember that the snow removal ordinance applies to property owned by businesses, rental property, condominiums, and townhouses and the sidewalks in front of vacant houses.

Please be a good neighbor and keep your sidewalk safe and free of snow and ice. If your neighbor can not shovel and you can shovel their walk too.