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posted: 3/17/2012 1:56 AM

On homes and real estate: Taxes based on property value

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Q. I own 30 acres of vacant land. I wanted to build a pole barn on the property. The town would not permit it unless I had a house built there first. To get the ball rolling, I applied for a special use permit and built an 800-square-foot "seasonal camp." I'm not permitted to live in the house year round until I increase the square footage to at least 1,000.

I'm attaching a copy of my tax bills for your review. I'm paying the same amount of taxes on the property as I would if I were a year-round resident. My question is this: Shouldn't I be paying a reduced rate, considering I'm not allowed to live there year-round?

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A. Property taxes are based on the value of your property, on what an assessor figures it might sell for on the open market. How many days a year you live there doesn't make any difference. If it did, a lot of snowbirds who spend winter in the South would be receiving discounts.

Q. My CPA says the maximum amount for a couple selling their longtime home is tax-free capital gain of $500,000, or $250,000 for singles. Your column said twice that. What gives?

A. Just an extremely public senior moment! Of course I know better, can't think where my head was when I typed that. It's the worst mistake I've made in 37 years of writing this column. I hate to think of how many readers I've misled … although, come to think of it, maybe I didn't do too much damage. After all, I can't imagine many homesellers are worrying about taxes on a million dollars' profit anyhow.

Q. My husband and I are getting ready to remodel our main bath on the second floor and are considering putting in just a walk-in shower and forgetting the tub altogether. Do you think that could be a problem when we go to sell it in the future? Would it devalue the house?

A. Someone sent in that very question a couple of years ago, and it brought a flood of responses. When I sorted the email out, the opinions were pretty much 50/50. Many said, "We'd never buy a house without a tub" or "Where would we wash the dog?" or " …the grandchildren?" Just about as many, though, wrote something along the lines of "Haven't used the tub once, waste of space" or "We'd sure go for an impressive walk-in shower."

Appraisers consider anything that cuts down on the pool of potential buyers as detracting from market value. On the other hand, you might find some buyers particularly enthusiastic about a walk-in shower. That's about all I can tell you -- sorry. Only you know how long you're likely to be in the house and how important it is to take resale into consideration.

Q. I am disabled and under 60 years of age. I receive a Social Security check and an SSI check. I also get most of my meds and medical bills paid for.

I own my own place but I hate where I am. I have my place up for sale but no one is buying right now. I have a chance to buy another place right now that I like at a low price. The Social Security people said I couldn't do this. My second place would count as income property, and I would lose all of my benefits.

Is this true? How can I make this happen without losing all of my disability benefits?

A. Owning two houses would give you too much potential income to qualify for those benefits. And anyhow -- are you sure you could finance the second place before you sold your present one?

Concentrate on selling that house first. Of course people are buying. You just need a price level that attracts offers. There's no use waiting for prices to rise so you can get more for your place. When that happens, you'll also have to pay more for your next house. If you're buying and selling in the same market, it doesn't matter whether prices are low or high. What you lose on one end, you make up on the other.

Q. How would lifting restrictions on my property affect my future taxes?

A. Sorry, I don't know what restrictions you're speaking of. Even if I did, I wouldn't know the answer. Contact your local assessor's office and discuss the matter directly. It's a good question and you needn't hesitate about asking.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

© 2012, Creators Syndicate Inc.

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