RE News, Real Estate

川普的新稅法對加州人的影響

(Photo credit: AccountingWeb)

2017年12月22日,川普總統簽署“減稅與就業法對加州人產生哪些重大影響呢?

總的來說,新稅法對大公司,股東,富人和中產階級非常有利。 然而,對於紐約州和加州等高稅收的“Working Wealthy”,總收入在40萬美元至150萬美元之間的人,可能會產生負面影響。 不幸的是,“工作富裕”這一族群屬於昂貴矽谷房地產買家的多數。

公司稅率從35%降至21%,而且這個改變是永久性的; 個人所得也有下降但這個新稅率將在2025年到期除非國會將其延長。收入水平每年都會隨著通貨膨脹而上升。 但由於該法使用的是鍊式消費價格指數,因此它們的漲幅會比過去緩慢,但隨著時間的推移,這將使更多的人進入更高的稅率。

目前的最高稅率是60萬美元,從39.6%降低到37%,這兩個變化對於超級富裕的人來說是一件好事,但對於那些綜合應納稅所得在60萬美元到120萬美元之間的夫婦來說,則是代價高昂。

它取消公司的AMT, 卻保留個人最低稅率(Alternative Minimum Tax) ,將免稅額從單身的54300美元增加到70300美元,夫妻的從84500美元增加到109400美元。 這項免稅措施逐步淘汰,單身50萬美元,夫妻100萬美元。

2018年標準扣除和豁免在新的稅收規定也做了大改動。根據現行法律,2018年夫婦合併申報的標準扣除額將從13,000元跳到24,000美元。 單身者從6,500美元跳到12,000美元。撫養豁免目前為個人免稅額是4,150美元,將被廢除。因此,儘管該法增加了標準扣除額,一些有子女的家庭將繳納較高的稅款。

這項法案將遺產稅免稅額提高到了單身1120萬美元,而夫婦則為2240萬美元。這對最富裕的1%的人最有利。

該法案取消了大部分的列舉扣除 ,這包括搬家費用(軍隊成員除外)。 在2018年簽署離婚協議者,對於須付贍養費的人在2019年報稅時將不能再當作支出扣除,而接受贍養費的人還是必須當作收入申報 

州稅和地方稅仍然可以逐項列出,但現在上限為1萬美元,且必須在財產稅,收入稅或銷售稅之間選擇 。 Primary and secondary residences的房貸利息仍可扣除,但是貸款金額從原本的100萬美元,降低到75萬美元(目前已有貸款的人不受此限制)。

該法擴大對2017年和2018年醫療費用的扣除 ,它允許納稅人扣除收入的7.5%或更多的醫療費用(原為10%)。

兒童稅收抵免(child tax credit)現在是1000美元,夫婦收入11萬美元,其他人收入75000美元才開始逐步淘汰(phase out)。 而新的法律,將稅收抵免變成兩千美元,其中一千四百美元是可退還的稅收抵免。 而且直到夫婦收入40萬美元和單身20萬美元才開始淘汰。

該法案廢除了 2019年沒有醫療保險的人的奧巴馬醫療稅(罰款) 。

Current tax law is a win for real estate investors and landlords but keeping in mind that many of the changes expire in 2025.

Under the new law, there is now a deduction of 20% for qualified business income for pass-through businesses. Those are businesses where the entity itself does not pay taxes, but the tax is instead passed through to the owner. Sole proprietorships, partnerships, and S-corporations are examples of this kind of business, as are limited liability corporations.

LLCs are commonly used by real estate investors and landlords, making the new code very beneficial to them. It’s also a popular option to provide privacy and an additional level of asset protections, experts say. It’s also an option when buying a second home or vacation residence that will provide rental income.

This special deduction is allowed against business profits, and does not apply to wages earned by the business owner. Owners get to deduct 20% of pass-through income, meaning only 80% is taxed. They will be taxed 29.6% on income that would otherwise be taxed at 37%. The 6% difference could add up to some serious savings for real estate investors who buy under LLCs. These changes, among others, are big wins for the real estate industry.

Taxpayers can also deduct 20% of income received as qualified Real Estate Investment Trust dividends so they may see savings there as well. And like-kind exchanges of property, also known as 1031 exchanges, will still be allowed. So if an investor sells a property and buys another qualifying property—be it “skyscraper or a piece of dirt,” he or she can defer paying tax on gains from the original property.

Worry over the housing market

Many taxpayers are lamenting the loss of deductions, including the lower mortgage deduction and the new cap on state and local tax write- offs. Although the standard deduction is doubled, many taxpayers who have had significant itemized deductions will see those drop.

Going forward, the deduction for mortgage interest is limited to underlying indebtedness of up to $750,000, or $375,000 for married taxpayers filing separately. Previously, the upper limit had been $1 million. Plus taxpayers can no longer deduct interest on home equity loans, unless the money was used for renovations or other home improvements.

Additionally, the overall deduction limit on any state and local tax, a combination of income tax, real estate tax or sales tax, is capped at $10,000. Previously, there was no cap, and highly taxed residents of states like California, New York and Connecticut will be the most affected by this change.

Many Americans made a mad dash to prepay these taxes at the end of 2017, but found that they couldn’t. Many municipalities assess the tax at the end of the year and the tax payment is then due the following year. You can’t pay 2017’s taxes and 2018 taxes, not assessed yet, and get a larger deduction. You can, however, pay down debt to maximize your interest deduction. Some folks are allowed to make interest-only payments. That could be a viable strategy for some.

Some economists think these tax changes will make home buyers skittish, and bring home prices down, the changes could create a “headwind” for housing prices, according to MarketWatch.

They should induce many homeowners to switch away from itemization. Collectively, the changes are likely to reduce the utilization of the itemized mortgage interest and property tax deductions, and in turn reduce the value of owner-occupied housing as a tax shield.

Without the deductions as incentives, potential buyers may decide to rent instead that there will be an uptick in the rental market. If there’s no real benefit to the buyer, why not stay in a rental?

Estate planning to think about

One area people should be reevaluating is estate planning. Up to $11.2 million per person ($22.4 million for a couple) of an estate can now be transferred without tax penalty, which is double the amount allowed in the previous code.

That means those with significant property holdings might want to gift some of the titles of that property to their beneficiaries now, rather than waiting. This, like many of the individual changes to the code, is set to expire in 2025.

Experts agree that revisiting all estate planning provisions is crucial under the new tax code.

Estate plans created before 2013 should definitely be reviewed, and even recently created plans may need to be reconsidered in light of dramatically increased exclusions.

And although taxpayers should be looking for new ways to save, it’s important to remember many of these changes are temporary. Having an exit strategy is key.

 

註: 1/28 在Cupertino有一場世界日報和紐約人壽所舉辦的一場有關新稅法的講座, 有空的人可以前往參加.

RE News

Western National Group Buys 6.5 Acres at the San Jose Flea Market for $35MM

Image courtesy of KTGY Architecture + Planning (EDITOR’S NOTE: According to public documents, the transaction closed in late April of 2017 for $35,010,000.)

SAN JOSE, Calif., July 11, 2017 — Western National Group has purchased a 6.5-acre parcel of land from Berryessa Properties, LLC — owners of the San Jose Flea Market, a family-run business that remains one of the largest outdoor markets of its kind in the nation — for multifamily residential and retail space. Western National Group plans to develop up to 560 multifamily units and approximately 37,000 sq. ft. of ground-floor retail space in the fifth phase at Market Park San Jose (www.marketparksanjose.com), a 120-acre, mixed-use, transit-oriented community adjacent to the Berryessa BART station, scheduled to open by the end of 2017.

With the proceeds from the sale of the current phase together with a previous transaction with KB Home to build 162 city-style townhomes on 5.6 acres of land, San Jose Flea Market will contribute $5,000,000 to the City of San Jose Dept. of Parks, Recreation and Neighborhood Services to help pay for two city parks totaling approximately 7 acres, plus an additional $6,000,000 for utility infrastructure improvements in Market Park’s North Village.

The land sale transactions have been brokered by Ralph Borelli and Chris Anderson of Borelli Investment Company, a commercial real estate firm that has served the Santa Clara Valley for 62 years.

“As Silicon Valley continues to grow, there’s an ever-increasing need for places for people to live,” said Ralph N. Borelli, chairman of Borelli Investment Company. “Market Park San Jose, located immediately adjacent to the soon-to-open Berryessa BART station, is ideally situated for families and individuals — whether they plan to work in downtown San Jose, at one of the Valley’s many high-technology firms, or in Oakland or even San Francisco, which will be only about an hour away via convenient BART.”

Modern one-, two- and three-bedroom apartments will be offered within a multi-building, mid-rise complex — with retail stores and restaurants occupying street-level spaces. The apartments will feature efficient design layouts highlighted by attractive accents and upscale finishes, in a location that’s ideal for those with active lifestyles.

When added to the 449 townhomes and single-family residences previously built by KB Home or nearing completion within the community, the new apartments will bring the total number of housing units there to more than 1,000. Still planned are another 100,000 sq. ft. of supermarket-anchored retail space in a center to be developed in Market Park’s North Village. The shopping center is scheduled for a 2019 opening.

The master-planned community is also envisioned to eventually host a separate South Village with an additional 1,818 residential units and up to 2,000,000 square feet of mid-rise office and retail space, plus parking. VTA and BART service, as well as a new interchange at Mabury Road and Highway 101, will allow for efficient transportation for the residents and those people employed at Market Park San Jose.

“The Market Park community is destined to become one of San Jose’s signature mixed-use developments,” Borelli remarked. “With affordable housing, retail and restaurants, future office space, neighborhood parks, lush greenbelts, and the Coyote Creek trail bisecting the community, this will be a uniquely welcoming and reinvigorating place to live.”

For additional information about sales and leasing opportunities at Market Park San Jose, please contact Ralph Borelli or Chris Anderson at Borelli Investment Company. Visit http://www.borelli.com or call (408) 453-4700. Or go to the community’s website at http://www.marketparksanjose.com.

The San Jose Flea Market continues to serve guests on Wednesdays, Fridays, Saturdays, and Sundays from dawn until dusk, excluding holidays, at 1590 Berryessa Road in San Jose. For more information, call (800) BIG-FLEA (244-3532) or visit them at http://www.sjfm.com.

 

About the San Jose Flea Market
For 57 years, the San Jose Flea Market has been a place where families have made memories while playing, shopping and eating together. Today, it remains one of the best destinations in the region to spend an inexpensive and fun-packed day. A small city with a life of its own, the San Jose Flea Market currently includes a farmer’s market that’s 1/4 mile long; an average of 3,000 vendor spaces weekly; 15 snack bars; 30 food, fruit and beverage carts; and a FunZone with a vintage carousel, mini-Ferris wheel, and playground with inflatable slides. More than three million people visit the San Jose Flea Market annually. Learn more about the San Jose Flea Market at http://www.sjfm.com.

About Borelli Investment Company
Now in its 62nd year in business, Borelli Investment Company is one of the oldest commercial real estate firms serving the Santa Clara Valley, Central Valley and Sacramento areas. The company provides a full range of commercial real estate services — from development and asset management to land sales and property management services — currently entitling over 3,000 lots — as well as general contracting through its SiliconX Construction affiliate. More information about Borelli Investment Company’s services may be obtained by calling (408) 453-4700 or visiting http://www.borellli.com. For more details on sales and leasing opportunities at Market Park San Jose, visit http://www.marketparksanjose.com.

RE News, Real Estate

Tight Housing Inventory Restraining Home Sales, But Builders May Shift Emphasis to Entry-Level Market

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For-sale housing inventory fell to a decade low during August, and limited housing stock along with strong demand for homes are beginning to encourage homebuilders to shift their focus from larger, luxury homes to smaller, entry-level housing. This change could provide some relief to the supply-constrained housing market, though a larger impact will likely not be realized until the spring. Through the remainder of this year, newly formed households will likely continue to favor rentals, sustaining steady demand for the record number of apartments scheduled for delivery in 2016.

New-home builders focused on larger, luxury homes since the recession as buyers of these homes faced fewer credit restraints and remained active in the market while first-time homebuyer activity weakened. As a result, a shortage of smaller, entry-level homes typically targeted by first-time homebuyers weighed on the market. Builder sentiment, however, has begun to shift as they seek to capitalize on rising demand for single-family housing. Builders are beginning to construct more smaller homes with lower price points and geared toward the entry-level buyer. In the second quarter, the median square footage of a newly constructed single-family home declined by 70 square feet from the median of homes built in the first quarter, while sales of new homes in the $200,000 range strengthened.

Despite healthy job creation and low interest rates, sales of existing single-family homes have failed to advance as inventory constraints and high prices keep many would-be buyers from purchasing homes. In recent months, sales activity has flattened but remains above the long-term average, and the supply of existing single-family homes for sale fell to 4.2 months in August, the lowest level since mid-2005. Rising prices have been driven by this shortage of listings and healthy demand, with the median advancing more than 4 percent above the prerecession peak to $240,200 during the month.

Household formation during this growth cycle has favored renting rather than homeownership, pointing to a shift in lifestyle and barriers to homeownership. As a result, apartment developers have ramped up construction, and builders will complete 320,000 units this year, the highest annual total since the 1980s. Healthy net absorption will keep vacancy near 4 percent through the remainder of the year.

Mortgage applications are up more than 25 percent from one year ago, but applications for home purchases have only increased 10 percent during the span. Low interest rates and rising home values are driving significant refinancing activity, leaving some homeowners with more disposable income for home improvement projects. As a result, sales at home improvement stores have increased 2.2 percent over the last year, fostering healthy retailer expansion. This year, retail vacancy will fall to 5.6 percent, the lowest level this business cycle.

RE News, Real Estate

Modifications Proposed to Redwood City SYUFY Site Redevelopment Project

syufyBy Jacob Bourne

A conceptual design review process for a residential mixed-use project at 557 East Bayshore Road in Redwood City has been reengaged following a hiatus as the original proposal was determined to be incomplete by Planning staff in December 2015. In September, developer SyRes Properties, LLC submitted another iteration of the plans addressing the issues cited. BDE Architecture is now involved in the planning process and David J. Powers & Associates Inc. is the environmental review consultant.

The property is located on the Bayfront with views of Bair Island and has been mostly vacant since 2008, with some uses for parking and storage. The project aims to redevelop spaces formerly used by Century Theaters, which relocated to Downtown.

“We just received the new conceptual plan submittal and it’s being routed through the departments for comments,” said Lisa Costa-Sanders, project planner. “We should get comments back this week and then the EIR process will be re-initiated. The project will go before both the Planning Commission and City Council. No meetings are scheduled as it’s still in the early conceptual stage of the process.”

The most significant issue with the original proposal was the size of the residential aspect. While the prior design called for 550 units, only 336 multi-family residences are now being proposed, with the commercial component of 100,000 square feet of recreational space remaining the same. The 550 units had been found to be inconsistent with the General Plan and zoning requirements. During the preliminary stages, City Council had reviewed the conceptual plans and expressed concerns about the timing and scale. At that juncture, the results of a city-wide traffic study has not been completed and decisions on large-scale projects were put on hold.

With the project’s current 336 housing units, a Zoning Map Amendment is required to allow for the high-density residential. A decision on both the development application and the zoning change will be made concurrently by City Council. According to Costa-Sanders, the approval process could take between six months and a year.

The commercial aspect is geared towards high-end sports and recreation with the VillaSport Athletic Club & Spa complex that will front East Bayshore Road. The complex includes four swimming pools, two basketball courts, racquetball area, child care facility, spa, and fitness centers.

The multi-family residential building area facing Bair Island, will total 480,698 square feet and include market-rate, rentable studios, one and two bedroom units averaging 816 square feet. A combination of partial-below-grade garage and surface parking will provide 575 spaces. Landscaped outdoor areas total 13,044 square feet and include fire pits and outdoor kitchens for residents. Building amenities include workspaces, fitness center, club lounge, bike shop and a pool.

“The Bay frontage is a prime opportunity to bring the natural environment into the site while creating a strong connection to the neighborhood,” wrote Jonathan Ennis, president BDE Architecture, in a letter regarding the project. “The intent is to integrate native planting throughout the project and look for opportunities to add to the restoration of the Bay frontage. This project will embrace pedestrian and bicycle circulation around and through the site, creating linkages between VillaSport and the new, as well as the existing, residential units. The development pulls back from the Bay frontage in order to provide gathering spaces and platforms to experience nature allowing for the neighboring communities to connect.”

RE News, Real Estate

Walker & Dunlop Closes $51MM Loan For Locale Apartments in Redwood City

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Walker & Dunlop, Inc. (NYSE: WD) announced it closed a $51,110,000 loan for Locale Apartments, a newly-built Class A+ rental community in Redwood City, California.

The Walker & Dunlop team, led by Ralph Lowen, Jeff Burns, and Justin Nelson, structured the loan to include 10 years of interest-only payments at a low, fixed interest rate, well below 4 percent. The loan was processed as a Fannie Mae Near-Stabilization Execution, which offered competitive proceeds, exceeding 100 percent loan to cost, which will allow the borrower, Acclaim Companies, Inc., to retire the construction loan and preferred equity financing. The borrower is seasoned in the local market, and the key principals of the property have 19 years of experience owning and managing multifamily properties.

Mr. Lowen commented, “The Walker & Dunlop team was honored to work on this deal with Acclaim Companies, Inc. Locale Apartments represents the future of multifamily living, and the new core of Silicon Valley. We are pleased to take part in this transformative time in Redwood City’s history and are grateful for this opportunity to strengthen our relationship with Acclaim.”

Acclaim Companies, Inc. Founder and Managing Partner, Mark Johnson, added, “I was pleased to partner with Ralph Lowen and the Walker & Dunlop team on the takeout financing for Locale. Ralph earned my business in 2008 when most lenders were running for cover. Over the years Ralph and his team have earned our trust by providing great service and competitive terms on our financing needs. At Walker & Dunlop, Ralph is now surrounded by talented professionals like Jeff Burns who secured our Fannie Mae loan at the most competitive terms and then executed flawlessly on the delivery.”

Locale Apartments is a 133-unit, conventional multifamily property located in Redwood City, California near the heart of Silicon Valley. Completed in 2016, the property offers luxuriously-appointed units consisting of studios, one-, and two- bedroom apartments. In-unit features include Wi-Fi hubs on each floor, stainless steel appliances, keyless fob access, Nest learning thermostats, and a thermal solar water heater. The building is also pre-wired for Google Fiber, a 1 gigabit internet service which is up to 100x faster than standard high speed internet. The community amenities offered are also high-quality, including a roof-top deck, outdoor spa, fitness center, private club room, bike storage, pet area, and electric vehicle charging at half of the parking spaces. Locale enjoys access to renters such as Stanford University patrons, and tech employees from companies such as Facebook and Google, and exceeded 90 percent occupancy as of July, 2016.

About Walker & Dunlop
Walker & Dunlop (NYSE: WD), headquartered in Bethesda, Maryland, is one of the largest commercial real estate finance companies in the United States providing financing and investment sales to owners of multifamily and commercial properties. Walker & Dunlop, which is included in the S&P SmallCap 600 Index, has over 500 professionals in 24 offices across the nation with an unyielding commitment to client satisfaction.