Aceable Agent Level 5
Straight-line Depreciation Recovery Periods for Depreciable Assets are:
**The recovery period for residential income-producing property is 27.5 years.** Residential investment property includes apartment buildings, vacation rentals rented out more than 14 days a year, rental homes, and any other property people rent to live in. **The recovery period for commercial investment property is 39 years.** Commercial investment property includes things like office buildings, shopping centers, industrial parks, and professional buildings.
2 Types of Plat Patterns
1. Gridiron 2. Curvilinear
Clean Water Act (CWA)
a federal law that establishes the basic structure for regulating discharges of pollutants into the waters of the United States for for regulating quality standards for surface waters; made it unlawful to discharge any pollutant from a point source ( discrete conveyances like pipes or man-made ditches ) into navigable waters, unless a permit was obtained; has specific protects for wetlands
Cluster zoning
Zoning that specifies housing density for an entire area overall, leaving a developer free to use some space for high-density housing such as apartments or garden homes Pros: - creates communities that are walkable/bikeable - allows for more green space - makes offering affordable housing easier, as units are smaller and less expensive to build - is a great set-up for communities of older adults with disabilities - encourages community - allows land to be left uncultivated for wildlife and water reclamation - allows space for shared recreational use and community gardens
Safe Drinking Water Act
a federal law that protects public drinking water supplies by instituting standards for drinking water quality and various technical and financial programs to ensure drinking water safety; focuses on all waters designed for drinking use, whether from above ground or underground sources.
The Planning board
a board with the *primary purpose of developing a municipality's paster plan* ; also advices other boards on planning issues, takes specific zoning actions, create criteria for and approve new developments and subdivisions, develop a capital budget to fund planning initiatives, and advises legislators on zoning and planning issues aka planning commission, planning committee, or department of planning
Certificate of Occupancy
a certificate given by the municipal inspector that gives permission for inhabitants to occupy a completed building structure after being inspected and having complied with building codes.
Taxation
a charge on real estate that is used to pay for services provided by the government
Plat
a detailed map that notes the property lines dividing individual lots; illustrates blocks ( collections of lots ) and mark sections, streets, monuments, & any other relevant public amenity or structure
Environmental impact statement
a detailed, written statement required by the National Environmental Policy Act from all agencies for any project using Federal funds to assess the potential affect of the new construction or development on the environment.
An Amendment
a document that makes a change to the rarified contract; made for the benefit of the community, or in accordance with a master plan
Clean Air Act
a federal law that aims to protect people and the environment from the harmful effects of air pollution; established comprehensive regulations regarding air emissions
Superfund Amendments and Reauthorization Act (SARA)
a federal law that amended CERCLA, designated more money to the Superfund trust, and established new environmental laws and regulations
Subdivision
the act of dividing land into pieces that are easier to sell or otherwise develop
Tax district
the area in which a taxing entity is authorized by the government to levy taxes
Assessment
the determination of the value of a property for tax purposes
Zoning
the division of land within a jurisdiction into separate districts within which uses are permitted, prohibited, or permitted with conditions; zoning regulates the use of land
Special Assessment
when additional taxes are levied on the homeowners in a neighborhood or area to pay for improvements that benefit the people living there; can be voluntary or involuntary; failing to pay can cause a lien to be put on your home
Grandfathered ( verb )
when existing structures are not required to change to meet new zoning regulations
Inverse Condemnation
when the government appropriates a private property without compensating the property owner
Incentive Zoning
when zoning ordinances are relaxed because a developer is building something deemed in the public interest
Building Permit
a legal document from a local authority that authorizes a construction or remodeling project
Upzoning
changing an area's zoning to allow more density; this can involve allowing smaller buildable lots, more square footage per lot, higher buildings, smaller side yard or setback requirements, or allowing multi-family housing to be built
Ad Valorem Taxes
property taxes that are based on the value of the property in question and paid to local tax authorities
Building codes
sets of regulations pertaining to building design, materials, safety, sanitation, and structure
Condemnation
the governmental act/process of seizing private land through exercise of eminent domain
tax base
the total taxable assets available in a specific area
After a master plan is adopted, what can a municipality start to create or refine?
zoning ordinances
Landmark Preservation and Historic Districts
Any city, town, or village can pass laws that create historic districts for buildings of historic, aesthetic, or other significance. Generally, these laws are administered by a municipal agency. They might prevent certain kinds of development in historic districts, require property owners in those districts to use certain materials or historically appropriate styles for updates to their homes, or just place plaques and other interpretive signage on buildings with historical significance.
What does zoning regulate?
1. How land is used - is this land residential? industrial? commercial? depends on the zone 2. Minimum lot size. - what's the smallest "buildable" lot size? 3. Maximum building height. - How tall can the tallest building be? 4. Kinds of structures that are allowed - The zone you're in will determine the permitted structures. 5. Setback. - How far from the street (and other buildings) a building has to be. 6. Density. -The maximum allowable number of units — denser areas allow more people per square mile, less dense areas allow fewer. 7. Parking spaces. - Zoning regulations can require builders to create parking for residents, especially in dense areas. 8. How air rights can be transferred. - some places allow residents to sell their air rights. 9. How natural resources can be used in the area - water rights, conservation requirements, wetland protections, mineral rights, and other environmental concerns are part of zoning. 10. How much land is set aside for public use and infrastructure. -includes land for streets, schools, hospitals, utility right-of-ways, parks, green space, and more. 11. Historic preservation and landmark sites. - sometimes these are overseen and regulated by a separate committee and set of laws, and sometimes they are part of zoning. 12. Limits on accessory buildings. - What kind of structures other than a home can be built on a residential lot? 13. Lot coverage - What's the maximum square footage that can exist on a given lot?
Two parts to creating zoning ordinances:
1. Making a zoning map - carving up the whole town into pieces, and assigning each piece a type of zoning 2. Outlining the permitted uses - rules are created for what is allowed ( & not allowed ) in each zone
3 Things that cause property to depreciate
1. Physical deterioration- the gradual process of items getting old & breaking 2. Functional Obsolescence- when something loses value because it becomes outdated 3. External Obsolescence- the loss of value from factors external to the property, like a change in zoning or a highway being built through a neighborhood
Common Zoning Classifications
1. Residential 2. Commercial 3. Industrial 4. Agricultural 5. Institutional 6. Open Space 7. Vacant land 8. Conservation land 9. Recreational
Rules for a 1031 Exchange
1. The new property (or properties) must be identified in less than 45 days from closing on the sale of the old property. 2. The new closing must happen less than 180 days from the sale of the original property or the tax return due date, whichever is sooner. 3. The properties must be of "like kind." 4. Any cash has to go through a qualified intermediary. 5. Personal property, inventory, partnership interests, and securities are not eligible.
3 Kinds of Exceptions zoning boards of appeals can grant
1. Use Variance- a variance that permits the use of land which is proscribed by the zoning regulations; deals with types of use 2. Area Variance- a variance that permits the use of land in a manner which is not allowed by the dimensional or physical requirements of the applicable zoning regulations; it deals with the physical land 3. Special Use Permit- allows specific kinds of uses in a zone that aren't the main use of that zone, as long as the property owner meets certain requirements
4 types of land-use controls that fall under the scope of police power:
1. Zoning 2. Building codes 3. Subdivision regulations 4. Application of rules
Zoning Board of Appeals
A local appointed board that has the power to review administrative rulings made by the planning board or another legislative body; its two main jobs are to interpret the zoning law and to grant variances and special-use permits to people who want to break the zoning law
Steps to creating master plan
A master plan balances the area's social and economic needs against it's environmental and aesthetic ones. **zoning regulations are based off of the priorities set forth in the plan** 1. Focus: Identify Major Issues 2. Inventory: Survey and analysis 3. Identify goals and objectives 4. Develop a plan 5. Review the plan 6. Implement and evaluate
a Subdivider
A person who buys undeveloped acreage and divides it into smaller lots for sale to individuals or developers or for the subdivider's own use.
Tax Shelters
ways that real estate investors avoid paying federal taxes on their investment income; usually temporary ex: a 1031 exchange is a tax shelter
EPA
Environmental Protection Agency
What is the difference between building codes and zoning laws?
Both building codes and zoning ordinances deal with how land is used. Zoning ordinances deal more directly with the land. Zoning limits what kind of buildings can exist and at what density, and sometimes what kind of facade a building can have - generally, **zoning deals with land and building code deals with buildings**
Four basic types of public land-use controls
PETE: - Police Power - Eminent Domain - Taxation - Escheat
Partial Assessment
Properties in GA area assessed at 40% of their home's market value, which is known as particle assessment. EX: Imagine that Martha owns a home with a market value of $300,000. The tax rate for her area is 5%. If her municipality used a full assessment, her annual tax bill would be 5% of $300,000, or $15,000. In Georgia, however, she would get a bill explaining that her home's market value is $300,000, while its assessed value is $120,000, or 40% of $300,000. Her annual tax bill would then be 5% of the assessed value, or $6,000: 120,000 x 0.05 = 6,000
What is the difference between spot zoning and granting a variance?
Spot zoning is a change that is to the detriment of the surrounding community while a variance benefits the community
What is the ad valorem ( property ) taxes a property owner owes based on?
The ad valorem (property) taxes a property owner owes are based on the area's tax rate and the property's assessed value.
Recourse Conservation and Recovery Act (RCRCA)
The public law that creates the framework for the proper management of hazardous and non-hazardous solid waste; RCRA gives the EPA the authority to control hazardous waste from "cradle-to-grave." This includes the generation, transportation, treatment, storage, and disposal of hazardous waste.
Nonconforming Use
when a property was operating within zoning law, but then the law changed in a way that prohibits the established use; nonconforming uses are usually allowed to continue but cannot expand
special assessment
when additional taxes are levied on the homeowners in a neighborhood or area to pay for improvements that benefit the people living there
Comprehensive Environmental Response, Compensation, and Liability Act ( CERCLA ) aka Superfund
a federal law that provides broad federal authority to respond directly to releases to threatened releases of hazardous substances that may endanger public health or the environment. CERCLA's main provisions are: 1. Establishing prohibitions and requirements concerning closed and abandoned hazardous waste sites 2. Establishing liability of persons responsible for releases of hazardous waste at these sites 3. Establishing a trust fund to provide for cleanup when no responsible party can be identified
Floating Zone
a flexible zone that is used to encourage a certain, desirable kind of development; allows a community to be picky about the kinds of projects they'll approve for certain zones; it removes the possibility of as-of right zoning for larger or higher-density developments a zoning district that "delineates conditions" rather than the more traditional use classifications that are typically found on zoning maps. While a floating zone is contained in a zoning code, it is only added to the zoning map after a project seeking that designation is approved. Thus, it "floats" in the zoning code until it is used for a particular project.
Condemnation Suit
a judicial proceeding for the purpose of taking property by eminent domain for public use upon the payment of just compensation for such taking; occurs when a property owner won't consent to sell
boot
a piece of non-like-kind property that evens out the exchange, and is not tax-deferred 3 common kinds ( though there are many more ) 1. Cash boot: If a seller gives the buyer money to cover repairs (often called a concession in non-investment property), that is a cash boot, and the buyer will need to pay capital gains tax on it. 2. Mortgage boot: If an investor takes over a mortgage worth less than the mortgage on the property they're exchanging, that's a mortgage boot and they pay taxes on the difference. 3. Personal Property boot: This could be appliances or fixtures in a hotel or motel included in the exchange. That's right, the investor pays taxes on that too.
Innocent Landowner Immunity
a policy that allows people or entities that acquire contaminated property and had no knowledge of the contamination at the time of purchase to be eligible for the 'innocent landowner' defense to Superfund liability if they conducted all appropriate inquiries prior to purchase and complied with other pre- and post-purchase requirements.
probate
a process by which courts determine and grant the appropriate ownership interest of an estate to creditors, taxing entities, and heirs of an owner who dies intestate
laws of descent and distribution
a set of laws that sets out the process of passing an estate to heirs when the owner dies intestate
difference between a subdivider and a developer
a subdivider is the person who creates the development and separates out the land, and a developer is the person who builds on the land and sells the homes
Depreciation
a tax deduction people who own investment property can take advantage of
Inclusionary Zoning
a type of incentive zoning that offers density bonuses to developers for including affordable housing, senior housing, or multi-unit housing in a development
Master Plan
a written document created by the local planning board to guide the future growth and development of a community; it's developed by a city, village, town, or county to provide a blueprint for sustainable growth, and balances social, economic, environmental, and aesthetic needs
Straight-line depreciation
an accounting method used to figure depreciation that allows the taxpayer to deduct the same amount every year of the asset's useful life
property tax
an ad valorem tax based on the area's tax rate and the property's assessed value; the tax is levied by the governing authority of the jurisdiction in which the property is located
Application of Rules
an idea that states that when there is a difference between a government restriction and a private restriction, the strictest restriction will be applied
Density bonus
an incentive-based tool that permits developers to increase the maximum allowable development on a property in exchange for helping the community achieve public policy goals
Capital Improvement
any upgrade or improvement to a property that falls outside the scope of normal repair and maintenance, usually with the intention of increasing value
Tax District
area in which a taxing entity is authorized by the government to levy taxes
Buffer Zones
areas that separate two different zones to give each one a little breathing room; a buffer zone is not dictated by zoning rules. Instead, it's chosen by developers and planners to make an area more pleasant for the people in the adjoining zones.
Downzoning
changing an area's zoning to restrict the density; accomplished by making lot requirements larger, less square footage per lot, increasing setback and side yard requirements
As-of Right Zoning
development that doesn't require approval from a community board, planning board, or zoning board of appeals because it falls within the zoning standards for the area; allows for as-of right development
dying intestate
dying without a will
Capital Gains Taxes
event-based taxes owed for profits made on the sale or exchanger of an asset such as stocks or real estate
Capital Gains Taxes
federal taxes property owners owe then they sell a property that has appreciated in value
Taxpayer Relief Act of 1997 ( TRA97 )
gives people a capital gains tax exemption on their **primary residence**, not an investment property or vacation home Married homeowners may exclude up to the first $500,000 on the sale of a primary residence and single homeowners may exclude up to the first $250,000. This exclusion is reusable every two years. Anything above $250,000/$500,000 is known as taxable income and is subject to capital gains taxes.
What does the qualified intermediary do in a 1030 exchange?
handle the funds and make the exchange
Zoning Regulations
laws passed by local governments that create zoning rules
Subdivision Regulations
laws passed by municipal governments that describe specifically how subdivisions can be created, rules for how land can be parceled out, how dense they can be, and other zoning-adjacent issues
Zoning Ordinances
local laws that control how land is used and what structures can be built in a designated district
Variance
permission granted by the government so that property may be used in a manner not allowed by the current zoning
How to find the annual depreciation allowance
purchase price + acquisition costs + renovations - land value = depreciable basis
a brownfield
real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Brownfields are often caused by railroads, gas stations, dry cleaners, chemical storage facilities, oil/gas refineries, manufacturing plants
Spot Zoning
rezoning a small parcel of land for a use classification totally different from that of the surrounding area for the benefit of the owner of that property and to the detriment of other property owners
National Environmental Policy Act
the federal law requires federal agencies to assess the environmental effects of their proposed actions prior to making decisions. Using the NEPA process, agencies evaluate the environmental and related social and economic effects of their proposed actions All federal agencies are required to prepare either or both types of documentation: 1. Environmental Impact Assessments 2. Environmental Impact Statements
Police Power
the government right to regulate and restrict land use in order to protect the public, including enforcing zoning and building codes
Capital Gain
the increase in the value of an asset; a capital gain happens when someone sells a property for a profit EX: If Joel bought a home for $300,000 and sold it a few years later for $400,000, his capital gain is $100,000.
Escheat
the legal doctrine by which the dependent's property will pass to the state without their consent if that individual dies without a will, a surviving spouse, lineal descendants, or other known heirs; also can be used if a property is abandoned by the owner
Density
the measure of the proportion of a given area used for residential purposes ex: a denser area has more people per square mile, a less dense area has fewer
Tax rate
the percentage of a property value that is taxed
Tax Rate
the percentage of the value that is taxed
Eminent Domain
the power of government to seize private property for public use; the government must pay the property owner just compensation ( meaning a fair value for the property that has been taken )
1031 Exchange
the tax-deferred sale or exchange of one investment property for another similar one; it allows an investor to sell a property, reinvest the proceeds in a brand new property, and defer all capital gain taxes aka tax-deferred exchange or like-kind exchange properties that can be traded: commercial property, industrial property, income-producing residential property, vacant property held for investment purposes, hotels, motels, holiday inns, leaseholds that bear lease terms greater than 30 years
Tax base
the total taxable assets available in a specific area
1966 County Home Rule Provision
this provision directly empowered counties to enact zoning and planning ordinances, while allowing the Georgia General Assembly ( the state ruling body ) to establish and regulate joint planning and zoning commissions Georgia's local government has total control over zoning and planning **Georgia's municipalities have even more zoning and planning power than those in other states**
Aesthetic Zoning
to require new building to conform to specific types of architecture or appearance - most common in developments that perceive themselves to be "upscale" and want to ensure that none of the neighbors ruin the look of the neighborhood by putting too much flair on their homes -Sometimes, instead of enforcing aesthetic uniformity with zoning, neighborhoods will use restrictive covenants or HOA bylaws..
