Allen Brothers Houston Real Estate


There has long been a capital gains tax exemption of up to $250,000 on the sale of a person’s own home, condo or other real property, or $500,000 for that of a married couple, but the rules have changed in recent years. Those who know the rules are even more likely to watch the appreciation of their homes and make certain they don’t pay a penny of capital gains tax that they don’t absolutely have to pay - a big bonus in the lavish Houston market.

Currently, individuals making anywhere from $37,000 to $411,000 will be taxed 15% by the IRS for long-term capital gains. That means in Houston's highly valued market, married couples in that income bracket filing jointly can save up to $75,000 on capital gains tax on their home sale; no small chunk of change to just let slip between your fingers when collecting the equity on your primary estate.

Prior to 1997 and the Taxpayer Relief Act, only persons over the age of 55 could take advantage of capital gains tax exemption from the sale of their homes, but now age is irrelevant and anyone can participate. That’s right: anyone. People in their twenties without children can now claim exemptions.

There is no longer a rule that states the money must be rolled over into another home purchase within two years of selling the previous one. This was called the “rollover rule,” but it too was laid to rest in ‘97. Now you may do whatever you wish with your money and still may claim the exemption.

The only factor involving time indicates a minimum of five years of ownership, not occupancy. The owner must have occupied the unit for at least two years out of that five. There are many misconceptions about this rule, with some assuming that the owner must live in the unit at the time of sale – but there can even be a tenant in the house at the time of listing and no rules will have been broken. There are, however, some other things to keep in mind:

You can only claim exemption on one residence at a time. The house must be identified as your primary residence, even if you aren’t living in it at the time of sale, as mentioned above. This means you can’t purchase a new house, lease out your old residence for a few years, and then sell both of them at the same time, claiming the exemption on both. You can, however, claim the exemption on your old house while living in your new one, then proceeding to live another 2 years in the new house in order to begin meeting all the minimum necessary criteria for another exemption. Fun, isn’t it?

When it comes to preparing your house for sale, any cash that you put into it such as new paint, drapes, cleaning, etc., cannot be deducted from the sales price. Significant investments in the capital improvement of your home, however - anything that adds permanent value - can be deducted. Examples of this might be the addition of a garage or a second story. This can be a slap in the face to people who have put several thousand into prepping their residences for the market, expecting to have it returned to them in the form of a tax deduction.

With the passage of Obama’s Affordable Care Act, a new tax has been placed on the sale of all real estate: a 3.8% Medicare tax will be placed on the investment/unearned income of all high income taxpayers. High income taxpayers are individuals reporting more than $200,000 annual income or married couples filing jointly reporting more than $250,000. The interesting part here is that the $250,000 capital gains exclusion applies with regard to the Medicare tax no matter what your income level is. If your income is below the threshold, the Medicare tax won’t enter into the equation. If your income is above the threshold but your capital gain is below the exclusion, the Medicare tax is also out. If your income is above the threshold and your capital gain from the sale of your home is above the exclusion, the Medicare tax will be imposed but only on the portion of the gain that exceeds the exclusion amount.

With a housing market like that of inner Houston, with high property value and a perpetually low inventory of listings, there is almost never a time when properties in this part of the city aren’t incrementally increasing in one manner or another. In the inner loop area of Houston, or around Tanglewood, Hunter’s Creek, Piney Point or Bunker Hill Village, owners can easily wake up one morning and discover that their properties have appreciated well beyond the $250,000 threshold. As one can see, there are a number of ways to take control of the situation long before this ever happens if one wishes. Call an Allen Brothers Realtors agent today to talk about your options.

Posted by AllenBrothers Realtors on February 27th, 2015 1:52 PM

Avondale is a Montrose subdivision in Houston, TX that has acquired historic status in the eastern and western sections. It is today a tree-lined and affluent community very near the core of the city, and it has some of the oldest mansions that are still occupied and standing in all of their splendor. Avondale was designed to compete with other affluent neighborhoods, such as Westmoreland and Courtland Place. The two historic districts are Avondale East and Avondale West, both developed in the 1900s. The former gained historic status in 1999, and the latter in 2007. The architectural styles used were Tudor Revival, American Four Square, Prairie, and Craftsman. Certain original features, such as hitching posts, red sidewalks and carriage houses, can still be seen today in the area.

In 1906 business ventures were just beginning to take residential development beyond the area directly south of downtown Houston along Main Street, by virtue of the streetcar lines that were being extended outward into what was then countryside and pastures. Joseph F. Meyer, Jr. sold a 31-acre pasture outside Houston to the Greater Houston Improvement Company in 1907 for $105,000 and it was quickly platted into 129 lots along three main streets. The curbs and sidewalks were concrete and the streets were paved with oyster shells. Teas Nursery was commissioned to plant 500 trees.

A contest was held for the naming of the subdivision with a $25 prize. Nine people submitted the name “Avondale,” which was a homonym of the English hometown of Shakespeare: Stratford-upon-Avon. The three main streets were named in accordance with the Shakespearean theme: Avondale, Stratford and Hathaway (today Westheimer). (Shakespeare’s wife was named Anne Hathaway.) The cross streets were Baldwin, Mason, Helena, and Taft.

The neighborhood was always intended to be a high-end one. There were many deed restrictions banning any development of an unwanted nature. There could be no apartments, inns, duplexes, lodging houses, or businesses of any kind in the district. Deed restrictions were extremely specific, and marketing was highly targeted to specific income levels at the time of original development. This was the case with many parts of Montrose when they were first developed. Income levels were steered to different areas based on pricing, size, minimum construction price and minimum setback of lots.

Automobiles were just becoming popular as Avondale first developed, and many contractors and members of the general population still used mules and horse-drawn carriages at the time, relying on them especially for commercial deliveries and things of this nature. Many mansions had carriage houses built behind them and hitching posts at the curb. The carriage houses were two-stories tall and in the same style as the main house. They had space downstairs for two automobiles and a small unit that could be considered servants’ quarters upstairs.

By 1912 Avondale had expanded westward past Taft Street by four blocks. The new north-south streets were called Whitney, Hopkins, Stanford, and Crocker. The new lots on Avondale Street were also large, as in the original neighborhood, with a back alley. The cross streets had a standard city residential-lot size of 5000 square feet.

The deed restrictions that helped Avondale develop expired in 1930, and businesses began opening in some of the houses. The neighborhood began to diversify over the coming decades in a positive way, but lost its exclusive character with the passing of the deed restrictions.

After World War II, apartments were built in the area to help solve a housing crisis and many of the old families left the area. Businesses took over Westheimer at this time as well. In recent times, a renewed passion for inner city living has put Avondale back on the map as the affluent community it once was, as so much about this beautiful area of town has remained just as it was when it was first platted and built 100 years ago, and the oaks planted by Teas Nursery have now grown to full maturity.

Call one of our sales agents at Allen Brothers today if you're interested in finding something to buy in this area.

Posted by AllenBrothers Realtors on December 18th, 2014 4:36 PM

New Era Of High-End Apartments In Inner City Houston

by Josh Foster, inner loop sales

There has been a renaissance of high end apartment development going on in Houston that has not been seen in years. This will lead to some fantastic changes as more people than ever continue to move to the Houston area, spurring the local economy, with no end in sight. According to the Houston Chronicle, 125,000 people moved to the city in 2013, with a similar number having arrived this year. What brings them? Houston leads the nation in job growth, to name one reason. It added 119,400 new jobs over the last 12 months according to realtynewsreport.com. These jobs are what pushes the multifamily market forward.

This combines with another trend, which is taking place across the nation: urbanization. Houston is filled with young professionals fresh from other parts of the country, and they are not interested in homeownership. This trend is reaching its peak, as apartment occupancy rates in the city of Houston hit 91%, almost an all-time high.

The Montrose area and all of the inner loop west of 288 has seen a kind of high-end construction boom since at least 2012. An old complex on 1920 West Alabama, as well as complexes on 2810 McDuffie and 1924 Marshall - where residents had enjoyed very low rents for years - are in the process of being demolished and ground will soon be broken for a huge luxury mid-rise. The eclectic area will feel the change, as property values will be increased and a more urban feel will continue to sweep Montrose. This will be in addition to a 20-story apartment tower on Chelsea Boulevard being built just south of 59.

Earlier in the year, according to prnewswire.com, The Muse Museum District was built on the cusp of Montrose and the Museum District by developer Behringer Harvard Multifamily REIT I, Inc. The development, on 1301 Richmond Street, is four stories, features eight-foot doors, ceilings of over nine feet, and full size washers and dryers. Flooring includes hard-surface planking in the living and dining areas and stone flooring in the kitchen and bathrooms. The luxury kitchens feature stainless steel appliances, with flat-top stoves, granite countertops, double-door refrigerators, 42-inch hardwood cabinetry with under-cabinet lighting, tumbled-stone backsplashes, kitchen islands, and under-mount sinks. Baths feature framed mirrors, oversize Roman tubs with tile surrounds and separate showers in select units. The units start at $1400.00.

High end, high budget multi-family apartment buildings are springing up in areas surrounding downtown that haven’t been touched by developers in years, as well as downtown itself. 10 new apartment buildings are in the works for the downtown area this year. The new construction will more than double the current population of the downtown area, which may completely transform it from the ghost town it is now into something of a more inhabited region. That is a status Houston’s central business district has been seeking for decades to have to no avail.

According to the Chronicle, Houston’s Camden Property Trust is expected to break ground in Midtown to the south with high-end multifamily units even more desirable than the ones that have already been appearing everywhere in the past couple of years throughout Montrose, Upper Kirby and the Heights. There is a proposed eight-story building of units in one project, and another separate project, both of which are qualified for tax breaks the city offers to builders developing in the inner city. Such development has already been the trend in other major metropolitan areas, according to the chair of the company.

Even further to the south, next to Hermann Park, Tema Development Inc. has just begun construction of a really big $75 million luxury apartment project, and it isn’t expected to reach completion until late 2016. It will contain 224 units and stand seven stories. It will include five penthouse suites, all overlooking the nicest view of the park. There will be a 12,000-square-foot courtyard containing a fountain, and a 9,000 square foot area with lounge, bar, club, conference area, fitness center, yoga area, swimming pool with a sunbathing ledge, fire place, barbeque spot, common Wi-Fi zone, bicycle storage and electric car charger.

Posted by AllenBrothers Realtors on December 4th, 2014 6:28 PM

East End To Get Luxury Townhome Project

An area east of Downtown will soon have 73 townhomes planned by a Houston-based builder that will be on two blocks of land just south of Buffalo Bayou on Kennedy Street. The property is owned by Padua Realty, and it is a few blocks north of a festive section of Navigation Boulevard where the original Ninfa's and a new Tiempo Cantina are located.

It isn't far from Guadalupe Park, and there are plenty of hiking and biking trails along the bayou. Padua Realty will be the land developers, selling the individual lots to Perry Homes. According to Tony Padua, his firm has established a plan with the local tax increment reinvestment zone to assist with much needed upgrades to the surrounding area. In this deal, Padua's company can pay the first upgrade costs and then receive compensation when taxes go up as a consequence of the improvements.

Padua says that this will truly empower them to upgrade all the roads and other utilities needed to have such a caliber of construction in the area. Several other similar high end projects are also in the works in the vicinity, say many people who know about the area. The area is just north of an already-thriving district directly to the east of Downtown Houston often called by the nickname ‘EaDo.’

A lot of people have their attention fixed on what will happen with a 136-acre piece of land to the north of Buffalo Bayou purchased over a year ago by William Harrison of Cathexis. The company has not revealed any plans for the site; Cathexis has many interests in oil and gas. The more settled single-family neighborhood just south and east of this section of town has been bringing in younger home buyers who seek the proximity of downtown and all the ease it affords them, along with many proposed future rail projects in the area, but the Heights and Montrose are out of their budget. Top agents note that bungalows in this area look very similar to the ones that were in West University 30 years ago and the Heights 20 years ago. An agent said a renovated house in the area even sold for 98% of its asking price.

Perry Homes should begin construction on the townhomes on Houston’s east side during the first quarter of 2015. They will be three and four stories tall. They will be between 1,700 and 2.400 square feet and most will have three bedrooms. Mainly the company builds in the suburbs, but has also done projects in Midtown and other central areas. Several years back it did a project east of downtown on Runnels near South Jensen. The company asserts that the work it is doing in the East End to modernize the area is part of a publicized attempt to make the area more friendly to pedestrians and mixed use in general. It has not come to a market price for the units as of this time.

Padua says the construction company plans to build the townhomes with top quality design standards with back-loaded garages and surfaces built only with stone, stucco or brick. They will all be regulated by their architectural designs to a consistent degree of quality. He sees enormous development possibilities in the area, which he calls the Bayou District. The new project is referred to as East End on the Bayou.

He points out that the bayou area to the north with three miles of hiking and biking trails is an especially wide part of the bayou, and quite similar to a jungle in its current state, with many native species, including birds and beavers.

Posted by AllenBrothers Realtors on December 2nd, 2014 8:55 PM

The real cost of getting a home in some of the top areas of inner loop Houston, TX right around Downtown changes quite a bit with each particular district and area you look at. Home prices have all risen immensely in the last couple of years due to the massive growth of the Houston economy.

Although you might find some homes due to demolish or that require massive amounts of work in the range of @$200,000, the majority of houses ready for occupancy start at $300,000. If you're willing to put effort into your search, however, you can still find something that isn't quite as expensive.
Posted by AllenBrothers Realtors on November 29th, 2014 2:34 PM

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