Ukulele – 5 Possible Tax Savings on Your Home

Sniff-sniff. One person I worked with would sniff-sniff and then clear his throat making a gurgling noise. One lady I worked with loved to hum. Another lady was an ice chewer. Then there was the rapid pen clicker. Click-click-click. And one guy who I shared an office with once would always bring in smelly food. Tacos, sandwiches with onions. The most annoying noises in the world usually occur in the men’s room. Guys in the men’s rooms make the strangest noises. You’d think it was a phlegm factory with varying degrees of a-hem. I’ve always wondered if women make the same noises in the ladies room?!?

I’m not an absent innocent from all of the annoying habits. I’ve been a nail biter since the 3^rd grade. I don’t smoke or drink, so I suppose it’s not the worst thing in the world. However, when on vacation for a week, cuticles grow in and there becomes a glimmer of hope for the nail salons to finally capture my business. But now I have motivation not to bite my nails. I bought a ukulele.

George Harrison of the Beatles would keep hundreds of them and hand them out as gifts. Harrison said everyone should play the ukulele. He gave one to Tom Petty, Bob Dylan, and Roy Orbison when forming the Traveling Wilburys. That led to some pretty good tunes. So, when we went to the guitar district at Cebu in the Philippines, I decided to buy one. First, George Harrison passed away and I wasn’t getting one from him. Second, it would force me to learn an instrument and stop biting my nails so I can pick those strings. There are a lot of good Harrison tunes to learn. “Here Comes the Sun” and “While my Guitar Ukulele Gently Weeps” are some of my all-time favorites. But Harrison’s first tune is on my mind right now. “Taxman” came about as Harrison’s first Beatles song as a writer and on lead. In 1966, the British taxman was taking 95% from top earners. Harrison fell into that category. The UK was still paying bills from WW2 but 95%! The lyric, “19 for you and one for me”, probably did more to lower tax rates around the world than any politician ever did. So, in that spirit, I’ll do a bit of George and give you 5 tips that might help lower the taxes on your home.

1. Buyer paying commissions and closing costs.

There is no rule that says the Seller pays for all closing costs and compensation. You can reverse it with the exact same monies. Let’s say combined all closing costs come to 7 percent on a $1.5m transaction. Now take that 105,000 in costs and lower the price of the recorded transaction by a 105k. Real estate taxes can often be based on the sales price (not a guarantee). Real estate taxes vary by county. But if you use an estimate of 2% on $100,000…. That is $2,000 a year. Multiply by 10 years and it adds up to $20,000. $0 for you and $20k for me as George would say. Talk to my friend, Geoff at Next Wave Title to get an idea on exact breakdowns if you are in the market to purchase on closing costs.

2. Homestead by March 1,2025

If you’ve recently purchased make sure you are homesteaded if you live in Florida 6 months plus a day. There is a minimum of $50,000 taken off the tax base and taxes can only go up 3% a year.

3. Fix up the house instead of buying remodeled

This is key especially if you are homesteaded. Let’s say you put in a $100,000 pool versus buying a home with one. And you spend $300,000 on remodeling with improvements. Your taxes can only go up 3% a year on the original base and not jump up to the new extra $400,000 value. Years back as a teenager I sat on a flight from Chicago to Palm Springs. Tiny Tim who sang, “Tiptoe through the Tulips” while playing his ukulele, was on my flight. $400,000 or $8,000 of tax savings per year is not so Tiny!

4. Put in Extras Yourself when buying New Construction.

Same as above but put in extras like the pool yourself after the house is completed.

5. Contest your taxes.

1 guy came to me once who wanted me to see if his tax bill was too high. He overbought the house for $500,000. His valuation was way off, and he saved nearly $10,000 a year in taxes. I’ve seen some who bought at the height of the pandemic in certain types of homes and condos where this might apply this year. This date to contest your market value is September 1, 2025. We can help you determine if this might be worthwhile over the summer.

If some of these work out, I promise you’ be singing “Here Comes the Sun” and your Ukulele won’t be weeping.