Friday, January 25, 2008

Indiana Property Tax Residential 1% Cap, Great News for Indiana

House passes gov's tax plan Thursday, January 24, 2008 INDIANAPOLIS | Gov. Mitch Daniels' plan to cut and cap homeowner property taxes cleared the Indiana House on a 93-1 vote Thursday afternoon. House Speaker Pat Bauer, D-South Bend, called it "an historic event" for such an expansive tax restructuring effort to receive wide support this early in the legislative session. He said it bodes well for cooperation with the Republican-led Senate. "We've had bipartisan support," Bauer said. "Now we need bicameral support." House Minority Leader Brian Bosma, R-Indianapolis, agreed that the vote represented "a very substantial accomplishment." But the GOP floor leader said he remains troubled by a Democratic amendment to the bill that exempts school classroom buildings from the voter referendums Daniels wants to require for local construction projects. State Rep. Craig Fry, D-Mishawaka, was the only lawmaker to vote against the plan, which is contained in House Bill 1001. He complained the legislation too closely resembles a past tax-relief effort that, he said, failed to deliver on promises to homeowners. "I just can't believe we're buying into this garbage all over again," Fry said during floor debate. The legislation, which advances to the Senate, would: * cap tax bills at 1 percent of assessed value for homeowners, 2 percent for landlords and 3 percent for businesses beginning in 2009. * shift $1.1 billion in school and welfare costs off local property taxes and onto the state's ledger. * raise the state sales tax by a penny, from 6 percent to 7 percent, to pay for the welfare and school swaps. * require referendums on most local construction projects but not school classroom buildings. * eliminate township tax assessors. * double the state income tax deduction for renters from $2,500 to $5,000.

Tuesday, January 22, 2008

Now Is The Time To Buy or Sell

Daily Real Estate News | January 22, 2008
Fed Issues Emergency Rate-Cut
The Federal Reserve, in an emergency meeting on Tuesday, slashed the key rate to 3.5 percent, citing a weakening economic outlook. The move marks the Fed's biggest rate cut — three quarters of a point — in more than 20 years.

As fears of a recession looms, the Fed said the rate-cut was to help restore confidence in the U.S. economy.

“While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households,” the Fed said in a public statement. “Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.”

NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun says the 75-basis-point cut in the Fed funds was a good step in giving the economy the boost and sending a clear message to both the market and to consumers.

“This strong rate cut will help lower mortgage interest rates and lessen the burden of adjustable-rate loans that are resetting in the current environment,” Yun says. “It also could help stimulate business investment in the wake of market uncertainties. We commend the Federal Reserve Board on its bold action, but at the same time we urge it to keep a close watch to see if additional action is needed.”

The Fed also approved a decrease in the discount rate — which, among other things, impacts how consumers pay home equity lines of credit — to 4 percent.

The Fed’s next scheduled meeting is on Jan. 30, where analysts say another rate-cut may be likely.

Source: REALTOR® magazine online and Dow Jones Newswire (1/22/08)