Are There Tax Benefits for Owning Land?

Being a property owner can come with an abundance of benefits, including tax breaks that can ease the financial burden of owning a property. 

The team at SRC Land is very knowledgeable about the tax benefits that come with owning land. We would love to share what’s in store for those who own property or are considering buying property for sale in Harlingen, TX. 

Growing From Tax Protection

Most property owners strive to make their properties more valuable over time. Some growth can come from your mortgage payments, which increase your equity ownership of the property. 

Other instances of growth include the doubling of your property’s value due to a prosperous market or as a result of increasing net operating income. The IRS doesn’t recognize capital gain unless you sell the property, therefore, your revenue continues to grow as long as it stays in the property. 

Fewer Taxes Due To Cash Flow

The IRS only requires you to pay taxes on the profit you earned from your property. If you want an approximation of how much you profited, add all of your sources of income and subtract it from your land expenses. 

Expenses include:

  • mortgage interest
  • repairs and renovations
  • property taxes
  • management fees
  • cost of travel

Depreciation of your land allows you to write off some of the property’s purchase price. It is at no cost to you to acquire the depreciation deduction, and doing so can help counteract other income, decreasing your tax liability.

Passive Activity Loss Deductions

Expenses made on your investment property usually result in a taxable loss.

The IRS allows you to claim at least $25,000 in passive activity losses from rental real estate against your income. To qualify for this benefit, your modified adjusted gross income must be under $100,00 or less than $50,000 if you file separately from your spouse (if married). If your income is more than the modified adjusted gross income, you are eligible to claim a passive activity loss of $1 for every $2 of income. 

Exchanges Excluding Taxes

If you sell your land and use that money to invest in buying more land, regardless of the differences, you can arrange the sale as a tax-deferred exchange. 

You can take the cost from your previous property into your new land while abiding by the IRS rules. The IRS doesn’t perceive this kind of transaction as a sale, so you are not obligated to pay any capital gain taxes or depreciation taxes on the transaction. 

Long-Term Capital Gains

It is greatly suggested to choose long-term capital gains to be less taxed in regards to selling and paying capital gains. Taking this suggestion will grant you the opportunity to deposit on your deductions to decrease your taxable summary.

When you rent out the property, you should expect it to go through some wear and tear. That would be seen as the depreciation of the property, which you can eliminate. Even if your property has an abundant cash flow from rental prices, you can remove depreciation costs from wear and tear. 

SRC Land Wants To Make Your Dream of Owning Property a Reality

Owning land can be one of the best investments to make because of potential profit and tax deductions. 

SRC Land gives anyone and everyone who wants to own land a chance to make it possible. If you are interested in seller-financed land for sale in Harlingen, contact us today!

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Claiming Property Taxes on Your Tax Return

Property owners can benefit greatly from being educated about the financial responsibilities associated with owning land. Knowing what types of tax deductions are available to you as a landowner can save you money during tax season. 

In Texas, home prices have escalated within the last decade. Therefore, property taxes have increased, regardless of Texas not having a state tax.

Local governments are the ones who establish property taxes, not the state, according to the Texas Comptroller. School districts, cities, and counties all affect your property tax. 

Thankfully, there are numerous property tax exemptions available to those who are eligible in Texas. These tax exemptions can be a great financial help to property owners with high property taxes. SRC Land would like to educate landowners and those considering buying land on how to potentially get property tax exemptions.

Property Tax Exemptions Available in Texas 

In Texas, there are quite a few property tax exemptions available for property owners who qualify. 

Most of the tax exemptions are available to the majority of landowners but some have specific requirements to qualify, for instance, disabled veterans or those who have wind and solar energy devices installed on their property. 

Here are the tax exemptions offered to landowners: 

  • Residence Homestead – School districts have to have a residence homestead exemption in Texas. If implemented in your county, you can be eligible for alternatives for further exemptions, like in counties that impose flood-control taxes. 
  • Inherited Residence Homestead – Residents of Texas who have inherited property may qualify for this exemption if the specific criteria is met. 
  • Seniors and Disabled Persons Exemption – Individuals 65 or older and people with disabilities can get this exemption. Widows and widowers of landowners may also be eligible if the requirements are met. 
  • Veterans Exemption – Limited exemptions are available to disabled veterans (and their surviving families) who qualify. Veterans who are fully disabled may be eligible to have their whole property tax bill excused. Spouses of the deceased may be eligible. 
  • Solar and Wind-Powered Energy Devices – If you use energy from solar and wind-powered energy devices on your property, you may qualify for this exemption. 

Eligibility for Property Tax Exemptions

If the Texas homeowner uses their property as their main residence, they are likely to qualify for the homestead exemption. 

Other exemptions require you to meet certain criteria. For example,  age requirements for the 65 and older exemption. Also, the person’s disability determines if they qualify for the disability exemption. 

Remember, most exemptions require you to fill out an application before the deadline.

Texas Property Tax Exemptions Values

The value of Texas property tax exemptions varies between exemptions and the eligibility of the property owner. The following is an estimate of the values of property tax exemptions:

Residence Homestead Exemption

  • School districts may provide $25,000 
  • 20% of property worth
  • $3,000 more in exemptions for counties that have farm-to-market or flood control taxes

Senior or Disabled Exemptions

  • Additional $10,000 of exemptions via the school district 
  • Extra $3,000 of exemptions

Veterans Exemption

  • Exemption affected by person’s disability 
  • Completely disabled veterans may get 100% back 

Solar and Wind Power Energy Device

  • The value of the property, including any renovations, determine eligibility for this exemption

There is a chance you meet the requirements for a few of these exemptions. It is in your best interest to apply for any exemption you may qualify for. 

Applying for Property Tax Exemptions in Texas

A lot of exemptions require you to apply only one time and you are rarely asked to submit a new application. Most of the exemption applications use very similar application forms, but a few are different. 

All applications are available on the Texas Comptroller’s web page

SRC Land Guiding Landowners on Property Taxes and Possible Exemptions

Landowners know that property taxes can cause a big financial impact. Thankfully, Texas offers exemptions that can lessen the financial strain property taxes cause, especially to those who qualify for multiple exemptions. 

Experts at SRC Land suggest learning about property taxes deductions if you are thinking of buying land for sale in Harlingen, TX.

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How To Make Sure Weeds Don’t Grow On Your Yard

What is one thing that can make your yard go from looking extraordinary to unkempt and messy? The number one culprit is weeds. Essentially, weeds are unwanted plants that grow in less than ideal places. 

Having weeds in your yard is not only aesthetically displeasing, but can also be an open invitation for bug infestations and diseases that can ruin your plants. If you are a landowner or are considering looking at lots for sale in Harlingen, TX, the team at SRC Land suggests you inform yourselves on how to keep those pesky, unwanted weeds off your yard with this guide. 

Some Facts About Weeds 

Just like all plants, there are various types of weeds. The type of weed typically falls under one of three categories: 

    • broadleaf weeds
    • grassy weeds
    • grass-like weeds

It is important to know what kind of weeds you are dealing with to better assess the problem and develop a solution. Specific types of weeds include:

    • dandelions 
    • crabgrass
    • thistles 
    • chickweed

Weeds are naturally able to spread easily. The traits in weeds that allow them to spread with such ease are:

    • they produce a copious amount of seeds 
    • weeds germinate quickly
    • seeds can remain inactive for lengthy periods of time

These facts on weeds will help you identify them and stop their rapid growth. 

Preventing Weeds From Growing on Your Lot

The best way to avoid weeds growing and taking over your yard is to start at the root of the problem and stop the spread before it gets a chance to grow. Preventing the spread of weeds is not a one-time chore, this is something that needs frequent upkeep to keep your yard looking beautiful and lively. 

Here are some tips on how to remove and prevent the growth of weeds. 

1. Use Pre-emergent Herbicides

This prevention method uses chemicals to stop the germination process of weeds. You can buy herbicides specifically for a type of weed or multiple weeds. Apply the pre-emergent in early spring before the weeds start to germinate. Water the area after application to activate the pre-emergent. 

2. Apply Mulch

You can use organic mulch to cover up weeds. Apply about a 2-inch layer of organic mulch. 

Applying does more than cover the weeds, it also smothers them by blocking the sun, which most weeds need to thrive. Using mulch also keeps the soil moist. Organic mulch is preferred over regular mulch because it is biodegradable and creates a healthy environment for your yard. 

3. Grow Plants Near Eachother 

Weeds need space to grow. With that being said, if you are worried about weeds taking over your garden, grow your plants in close proximity to each other. Planting your crops in a block spacing method, instead of rows, can help reduce the growth of weeds. 

4. When in Doubt, Pull

If you see a single weed that has sprouted, pull it from the base to make sure you destroy the possibility of it spreading. This may take some work if you have quite a few weeds growing in your yards, but it’ll be worth seeing your land looking neat and cared for.

 

Seller-Financed Lots for Sale in Harlingen

For over 20 years, SRC Land has been helping anyone with the dream of owning land make it a reality with our seller-financed lots in Harlingen, TX. 

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What First Time Land Buyers Should Know About Hurricanes and Their New Property

Buying land in a hurricane zone can be a bit complicated if you’re planning to build on the property. But with the right plan in place, purchasing such a property can be the best investment you can make.

At SRC Land, we not only want to help you through the entire process of choosing the right property, but we also want to make sure you can properly protect your investment from hurricanes and other severe storms.

About Hurricanes

Hurricane season is expected to last this year from June 1st to November 30th. To be prepared, there are four things individuals buying land in a hurricane zone should know:

1. Be mindful of hurricane tendrils: The tendrils emanating from a hurricane can be just as dangerous as its center. A storm hitting the Texas Gulf Coast can have tendrils that stretch in Central Texas, causing tornadoes and flooding.

2. Flooding: While hurricanes devastate coasts with wind, severe rain can cause irreparable damage inland, especially to properties near rivers and creeks.

3. Hurricane’s direction: The direction a hurricane is traveling can provide some insights into the amount of damage it makes. A hurricane’s right quadrant has the strongest winds, which can tell you where the most damage will be.

4. Up to 10 hurricanes in Texas: Through 2020’s hurricane season, a total of four hurricanes hit near the RGV. However, an average season produces 14 storms, including seven hurricanes.

How To Prepare

The lion’s share of damage from a hurricane comes from strong winds and flooding. Preparing for these dangers is key. Insurance and safety precautions are some things you can do better protect yourself and your investment:

l. Insurance is key

It is of utmost importance to have property insurance when building in a hurricane zone, and don’t settle for the first company you come across. Shop around to compare prices and to determine which provider offers the best coverage at the most reasonable price.

Another common mistake that can have truly serious consequences is thinking that their insurance will cover flooding. The most basic insurance DOES NOT cover flooding and will typically require you to purchase additional add-ons to your policy.

ll. Read the small print

Depending on your land’s location and risk level, your insurance premium might be more expensive. On top of that, make sure to get more than just general insurance.

With hurricanes being a risk in South and Coastal Texas, you will require storm protection, flood insurance, and other types of insurance coverage. It is important to note that flood insurance policies have a 30-day waiting period before coverage takes effect. So make sure to purchase this insurance in a timely manner.

The Safety Measures You Need In Place

There is no “overdoing it” when it comes to protecting your investment against a hurricane. Some safety measures you can take include:

1. Have a plan. A lot of damage from hurricanes can be mitigated with a proper contingency plan. An evacuation plan can even save lives.
2. Make sure the exterior of your home is safe. All large trees and shrubs should be trimmed before a major storm. If you own patio furniture, put it away or secure it to the floor.
3. Update where you can. Windows, doors, and garage doors can be upgraded to be impact-rated. In certain states, upgrading your safety measures could lower your insurance premium.
4. Place cars in safe areas. Make sure any parking areas are located on high ground and away from tall trees and shrubs.
5. Plan for electricity going out. Having an emergency power source and a proper surge protector in place is good practice to avoid electrical damage to your property.
6. Safe keep important documents. Keep all important legal and insurance documents in a waterproof safety deposit box.
7. Have a shelter room. Whether you build a home or a business site, building a shelter room for any occupants could save lives.

We Can Help You Find The Harlingen Property That Meets Your Needs.

Living in a hurricane zone can become stressful during hurricane season. However, these areas are also the most profitable and beautiful in the country.

If you’re thinking about buying in a hurricane zone, we got the land you’re looking for! At SRC Land, we can help you find and buy your land in one easy and smooth process. Our real estate specialists in Harlingen are here to offer you their experience and knowledge to help you during this new journey.

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