There are constantly new developments going on in the area of real estate law, and it is important to stay updated on these as they could heavily affect the way that you deal with lawsuits, tax issues, real estate legalities and other situations. Recently, the United States government made a few changes to tax and real estate laws that you will want to make note of. One of these changes has to do with energy efficiency.
In an effort to preserve energy and support homeowners to conserve their power use, the U.S. Congress has passed a law that will give tax breaks to homeowners who spend their own money to install energy-efficient mechanisms within their house. For example, if you choose to install solar panels on the top of your home, then you may be able to receive reimbursement for this cost. Also, anyone who chooses to conserve energy with other mechanisms for air conditioning and heating will be reimbursed.
The law says that there is a 10% tax credit that individuals can claim based on having spent money making any energy-efficient improvements to their existing homes. This same tax break is not available to those who are building a brand new home and decided to add in energy-efficient improvements. There are certain items that this 10% tax credit applies to and other times that are not applicable.
You will want to talk to a real estate attorney if you are confused about which items the credit applies to and how much credit you have the right to claim. Most of the time, the credit covers home features like insulation, hot water heaters, windows, doors, skylights, fans, and more. There is also a $500 overall limit for the use of this credit.
In addition to this change in real estate law, homeowners can benefit from the extended tax deduction for private mortgage interest. Homeowners can deduct the amount that they pay in private mortgage insurance each year at tax time. Private mortgage insurance is an insurance arrangement that is only required by those who paid less than 20% down on their house payment. The insurance is normally a benefit to the lender. The insurance will reimburse the lender if the homeowner fails to make mortgage payments at the correct time.
The PMI deduction was ended at the end of 2011, but the fiscal cliff deal has extended PMI for two additional years so that it would last through 2012 and 2013. If you are paying PMI, then you need to take advantage of this tax break that is currently in place. The PMI deduction is phased out by 10% for each $1,000 by which a homeowner's gross income (AGI) is over $100,000. Essentially, this means that individuals that have more than $110,000 in annual gross income cannot benefit from this tax break.
While these are the two newest changes to the real estate tax laws, there are many different rules and regulations that govern the tax process and allow homeowners to experience benefits. If you are not certain you are receiving all the tax benefits that you deserve, or if you were denied a tax break that you are rightfully entitled to, a local real estate attorney can get involved and assist you.
You may need to litigate or take legal action in order to get the benefits that you deserve. Don't hesitate to use this directory and find a local attorney that can help you today. With the right attorney on your side, you will be able to work towards your financial goals and receive the respect you deserve!