LOUISE BOLGER

from Anna Maria Island Sun June 23, 2021

BEACH BEAT

22 THE SUN REAL ESTATE

Where are the downsizers?

Long ago and far away, homeowners getting ready to retire would sell their family home to younger families looking to move up and purchase a smaller less expensive property. There was also this crazy notion of sales contracts containing a contingency on the buyer selling their home. Well, in case you haven’t noticed, those days are long gone.

The real estate market is so hot that homeowners frequently don’t want to sell because buying another property, even if it’s a smaller one, is too challenging. Retirees don’t want to risk the stress of finding something they’re comfortable living in and certainly don’t want the hassle of competing in the current market. Therefore, they’re not moving, which is feeding into the low inventory rates all over the country, freezing up the market.

Retirees also have plenty of good financing options without selling, should they need to tap into their equity. Refinancing both mortgage amounts and terms at today’s low rates will give them money in their pockets to offset the expenses of continuing to live in their homes. And, of course, reverse mortgages continue to be a viable option for some seniors. In addition, switching from a 30year amortization to a 15-year amortization would help to accumulate more equity down the road when seniors may be more comfortable selling.

There are plenty of financial opinions on whether retirees should carry a mortgage or not and everyone’s financial position is different and should be analyzed by a professional. With interest rates historically low and the stock market continuing to grow, many financial advisors will be pro-mortgage and advise to invest in the stock market, instead. For retirees with an income that is sufficient to cover the monthly carrying charges of financing, this could be the obvious decision.

There are many benefits to owning a home, whether you decide to continue carrying a mortgage in retirement or pay it off. With the new tax regulations, writing off the interest on a home mortgage is not as advantageous as in previous years, but again, everyone’s situation is different.

What isn’t changing for most homeowners is the capital gains exemption when you sell your home. The way the capital gains law stands now is single tax filers get an exemption of $250,000 of net gain on the sale of a primary home. Married couples filing jointly get an exemption of $500,000 of net gain on the sale of a primary home. This exemption can be used more than once by sellers who meet the requirements as often as every two years.

With the sale prices of homes accelerating daily, there will be plenty of homeowners who will exceed their exemption limits. However, homeowners can increase their cost basis and lower their gain if they make improvements to their homes over the years. This does not mean repairs - it means improvements on landscaping, renovations and extensions to the property. If you’re not sure what qualifies and you need these extra funds to add to your cost basis, you can find exactly what the definition of “improvement” is on the IRS website.

There will probably be a change to the capital gains laws, including primary home capital gains exemptions, coming soon. However, many sellers with gains within the $250,000 to $500,000 limits won’t be affected. Capital gains above those limits will depend on income level and other factors in the proposed tax bill.

Maybe my memory of things past is fuzzy, but wasn’t buying and selling homes more civilized years ago? It was certainly less stressful, but here we are with tons of equity and the worries that go along with it.

Castles in the Sand

LOUISE BOLGER

PINES: Owners OK with replacing trees

FROM PAGE 3

Regarding the June 2 comments, the letter says, “Such comments would suggest that the elected commissioner is not supporting her constituents in a fair and just manner. A commissioner, or anyone appointed to a committee, best serves the community by upholding ethical values that create a conducive working relationship, and a sense of pride and camaraderie amongst the constituents.

“While Mr. Chiles is correct in asserting that the Australian pine has been declared as ‘invasive’ by the State of Florida, his use of the term ‘shall’ seems to overlook the primacy of the owner in this decision. For example, on Feb. 6, 2006, the Sanibel City Council passed Ordinance 06-021 confirming ‘the rights of private property owners to retain Australian pines that currently exist on their private property,’ except in cases where they present an imminent danger. Similar ordinances represent the current disposition throughout Florida,” the Kellys’ letter states.

Gulf Drive, Cortez Road and the adjacent rights of way in Bradenton Beach are controlled by the state of Florida.

“Although we have not heard from the Florida Department of Agriculture, the Florida Department of Environmental Protection, the Florida Department of Transportation or any other state department that our trees pose an immediate threat, we wish to work cooperatively with the city commission. To this end, we would be prepared to discuss with the city commission the possibility of replacing, at its cost, the Australian pines with an indigenous species that would provide us with the windbreak protection that we have enjoyed from the current trees. This may likely remove any perceived danger to the area while further enhancing the entry to Anna Maria Island,” the Kellys’ letter states.

“It has been confirmed that the city had absolutely no interest in seeking state condemnation of the property or evoking eminent domain rights. We believe that the commission is sincere in this regard and that the commission will continue to respect our private property rights,” the letter states.

According to the letter, the Kellys’ home sustained significant damage during Hurricane Irma in 2017 and substantial repairs were then made in 2018.

“Further repairs were expected to be made in 2020, but plans were postponed by the COVID-19 pandemic. We intend to restore, in a timely fashion, the exterior of the home to reclaim its native Florida character,” their letter says.

When Perry finished reading the letter aloud, Mayor John Chappie said, “I did talk with one of the Kelly’s daughters. They are in for the long haul as residents, they’ve just had some obstacles that are very tough to overcome.”