Las Vegas Real Estate Snapshot: June 2015 Statistics

GLVAR Real Estate Statistics, June 2015

 

 

According to the Greater Las Vegas Association of Realtors (GLVAR), June 2015 was a strong month for Las Vegas real estate!

Though the number of available single family residential units and condo/townhouse units decreased, year-over-year, median list price increased just over 14%, for both segments, while average list price increased 13.9% for single family residential units and 7.8% for condo/townhouse units.

The number of available units listed without offers was mixed as single family residential units increased 4.3%, year-over-year, while condo/townhouse units decreased 0.2%.  Median list price of available single family residential units increased 12%, with median list price of available condo/townhouse units increasing 10.7%. Average list price of available units also increased, year-over-year, across both segments.

The number of new single family residential listings increased 11.6%, year-over-year, while units sold increased 14.2%.  In the condo/townhouse market, new listings decreased 2.1%, year-over-year, though there was a 6.3% increase in the number of units sold.

If you are interested in learning more about the Las Vegas real estate market or discussing current real estate opportunities, please contact the Brazill Team.

 

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Overseas Investors Accelerating CRE Property Price Gains

 

Overseas investors are accelerating commercial real estate property price gains and increasing foreign investment dollars may continue driving the trend.

While global real estate investors continue to increase their flow of funds into commercial U.S. properties, the trend appears to be causing property values to increase at a much faster pace than if the same or similar properties were bought by local investors.

According to a recent survey, CBRE found that investor demand for commercial property continues to increase as 53% of surveyed global investors indicated they plan to increase their purchases throughout 2015.  New York, Dallas and Seattle all made the top 10 list of markets where that money will be targeted.

“The appetite for global real estate investment is increasing as more investors intend to deploy capital outside of their own region this year. Competition for assets is intensifying and many investors plan to move out the risk curve in search of higher yields, a trend that will result in a stronger focus on value-add and opportunistic investments,” said Chris Ludeman, global president of CBRE Capital Markets. He cited the current low interest rate environment, economic expansion across an increasing number of markets, and improving real estate fundamentals as the main reasons investors are continuing to favor commercial real estate.

Foreign investment in U.S. commercial real estate has been growing consistently over last six years, according to Deutsche Bank analyst Ashley Hooper. The volume of deals last year topped $49 billion, surpassing the 2007 peak investment level of $47 billion.

“This positive trend appears to be continuing; so far this year we are up 140% over last year,” Hooper wrote.

A big portion of the growth this year came in February when Singapore-based Global Logistic Properties Ltd. completed its acquisition of the former IndCor Properties for $8.1 billion. Assembled and sold by Blackstone, the portfolio was one of the largest logistics platforms in the U.S., with 117 million square feet of industrial properties spread across 29 different U.S. cities.

Canada was the leading global buyer of U.S. real estate last year with $9.7 billion of direct foreign investment, according to research from CBRE. And before January 2015 was even over, Canadian investors transacted a significant $2.75 billion in U.S. real estate deals.

The continued flow of overseas investment is helping to drive up property prices, according to a new jointly authored paper from three university researchers.

Yu Liu, a professor in the Department of Real Estate, J. Mack Robinson College of Business, Georgia State University; Paul Gallimore, a professor at the School of Real Estate and Planning, Henley Business School, The University of Reading in the United Kingdom; and Jonathan A. Wiley an associate professor also at Georgia State published the research.

Their study examines the capital value performance for commercial property sales made by nonlocal investors, both when they purchase a property and when they sell it. The research found that non-local, out of market investors overpay when buying commercial property by an estimated 13.8%, and sell at an estimated 7% discount.

They also found the under-performance in buying and selling property increases as the geographic distance separating investor and asset expands. Out of market investors fundamentally overvalue similar assets sold to each other relative to assets transacted between locals, and they are also less patient as sellers.

Using CoStar Group data, the authors analyzed 10,971 office purchases and 11,444 sales in 138 U.S. markets. Their analysis controlled for investor clienteles, timing, location and sale conditions. The three hypothesized several reasons why out of market investors may overpay for CRE.

  • They might have an information disadvantage relative to local participants
  • They may be disproportionately represented by tax-exempt and institutional investors who have superior access to reduced cost of capital, giving them more of an ability to outbid other investors
  • They may be represented by less sophisticated investor clienteles
  • The investors may be coming from cities with more expensive rental markets, which could be skewing decisions.

“Their thesis quantifies what many CRE professionals have suspected for years: that foreign buyers are liable to pay more than their domestic peers for U.S. real estate assets,” said Eric Hawthorn, director of research and communications at Llenrock Group, a Philadelphia-based capital markets firm providing real estate debt, equity, joint venture partnerships and advisory services.

“Since several gateway U.S. markets are among the top destinations in the world for international CRE capital, foreign investors pursue opportunities here extremely aggressively,” Hawthorn said. “Whether deployed for stability or returns, foreign capital is flooding into U.S. gateways in such quantities that it is skewing the valuations of upper-tier properties across asset types.”

According to Hawthorn, foreign investors appear to be competing with each other, rather than with their domestic counterparts, which may create a disconnect between properties’ operating income and the sums that foreign investors will spend in order to outbid their peers.

Source: http://www.costar.com/News/Article/Overseas-Investors-Accelerating-CRE-Property-Price-Gains/171326

 

Q1 Offers Mixed Signals for Nevada’s Continuing Foreclosure Problem

The first quarter of 2015 offered mixed signals for Nevada’s foreclosure woes.  Despite a jump in default notices however, there were fewer repossessions compared to Q1 2014.

According to a new report from RealtyTrac, one in every 209 homes statewide received a foreclosure-related filing in the three months ending March 31, the third-highest rate in the nation behind Florida and Maryland.  Creditors started the foreclosure process on 3,070 homes in Nevada, up 166 percent from the same time last year, and 977 homes were seized at the auction block, down 42 percent from a year ago.

Overall, Nevada’s foreclosure rate was up 8 percent from a year earlier, while nationally it fell 8 percent.

RealtyTrac’s report included default notices, scheduled auctions, and bank repossessions.

The Irvine, Calif.-based company cautioned that Nevada’s increased tally actually “may be lower because of improvements in data collection.”

Las Vegas’ foreclosure numbers largely mirrored the state’s — no surprise given the valley has the bulk of Nevada’s population.

Creditors filed 2,239 default notices in the first quarter in Southern Nevada, up 142 percent from a year earlier, and 688 homes were repossessed, down 47 percent, according to RealtyTrac.

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After Years of Delays and Defaults, Southwest Valley Development Rises

Over the last decade, when Las Vegas’ construction industry was white hot, few areas experienced as rapid growth as the southwest valley.

Bolstered by new freeway access and a strong economy, investors flipped land for profit and built subdivisions, strip malls, office buildings, and hospitals, with even more plans for an area that years earlier was largely open desert.   Business then plunged with the recession, all but stalling future growth.

Today, as the economy improves, few places are seeing as much improvement as the southwest valley. Developers are building or planning to construct apartment complexes, industrial properties, big-box retail, and single-family homes around the 215 Beltway between Interstate 15 and Flamingo Road.

Despite the current growth, huge tracts of raw land remain throughout the southwest and much of this land will likely go undeveloped for quite some time.  Additionally, many fear that some investors are piling in too quickly and overbuilding again.

The overall resurgence highlights the steady comeback of a once-battered industry that, for many people, offers visual evidence that Southern Nevada’s sluggish economy is on the mend.

In June 2006, near the height of the real estate bubble, 112,000 people in the Las Vegas area worked in construction. That number plunged 69 percent to 34,800 workers in early 2012, according to the Associated General Contractors of America.  Today, 48,500 people work in construction locally, up 39 percent from the depths of the recession.

“We know the worst is past us, and that gives people confidence,” said Scott Gragson, a land broker and investor.

Projects underway or on the drawing board in the southwest include:

  • IKEA’s 351,000-square-foot furniture superstore, which broke ground April 9 and is slated to open in summer 2016
  • Panattoni Development Co. partner Doug Roberts’ two-building warehouse project, Jones Corporate Park, which is scheduled to break ground this month
  • Australian slot-machine maker Ainsworth Game Technology’s 300,000-square-foot Americas headquarters, poised to open by mid-2016
  • The Molasky Group of Companies’ two-story, 110,000-square-foot industrial building at the UNLV Harry Reid Research and Technology Park, which the company plans to lease to prescription-drug manager Catamaran Corp
  • At least a dozen apartment complexes and thousands of single-family homes.
Developers are drawn to the southwest valley for several reasons:  there is plenty of land, it’s a quick drive to the Strip and to McCarran International Airport, and it’s roughly equidistant from Summerlin and Green Valley, two of the valley’s most popular residential areas.

Rent in several sectors — apartment, office, industrial and retail — typically is higher and vacancy rates are lower in the southwest than in other parts of the valley with lots of land, including the northwest and North Las Vegas.

Moreover, Clark County commissioners in May 2013 voted unanimously to open roughly 3,600 acres, mostly in the southwest, to potential residential and other development. Airplanes, thanks to advanced technology, aren’t as loud as they used to be, so the county agreed to shrink McCarran’s noise contour.

IKEA executives had been eyeing the Las Vegas market for almost 10 years, waiting for the population to pass 2 million, and were “very much focused” on sites along the Beltway with good visibility and access, spokesman Joseph Roth said.

The popular Swedish retailer needed a large site for its megastore. Land ownership in the southwest is fractured heavily, so assembling a big tract can be a headache. The spot IKEA wanted, 26 acres at the southwest corner of South Durango Drive and West Sunset Road, was owned by one investor, and the chain paid a hefty price for it: $21.3 million.

The sale, by M.J. Dean Construction founder Michael Dean, closed in December. IKEA paid $819,328 per acre. Valleywide last year, land investors paid an average $276,422 per acre, according to brokerage firm Colliers International. Roth said the company paid “a fair price” for the property.

Meanwhile, Ainsworth CEO Danny Gladstone decided a few years ago he wanted to build the company’s Americas headquarters near the southeast corner of South Jones Boulevard and West Sunset Road, said Mike Dreitzer, the company’s president of North American operations.

Site work is underway. When finished, the property will have warehouse and manufacturing space, as well as offices for sales, marketing and finance personnel. It’s close to customers and the airport, and just 2 miles east of rival International Game Technology’s campus.

“We think it really is the new center of the gaming equipment manufacturers’ corridor,” Dreitzer said.

For large projects, though, the biggest source of development in the southwest is apartments.

Investors have been buying rental properties throughout Southern Nevada at a fast pace in recent years. The valley’s economic collapse created a big pool of potential renters by wreaking havoc on residents’ finances. Foreclosures, bankruptcies and short sales swept through the region, making it impossible for many people to obtain a mortgage, let alone afford a down payment.

Apartment construction lagged investment sales, but now it’s picking up speed. After opening just 367 units valleywide in 2013, developers completed about 1,700 units last year. As of December, they were projected to open roughly 5,750 units this year and almost 2,000 more in 2016, according to brokerage firm CBRE Group. Among current or planned projects, roughly 50 percent of the new units are in the southwest valley.

But developers may be getting ahead of themselves. They are building faster than demand calls for, RCG Economics principal John Restrepo said.

“It’s a great location, (but) that’s a little too much at one time,” CBRE broker Spencer Ballif added.

Nevada West Partners is the biggest developer in the southwest, with five projects totaling 1,600 units planned or underway. Partner Martin Egbert, whose group has developed apartments in the valley since the late 1980s, said he isn’t concerned investors might be overbuilding and possibly pushing down rental rates. Properties his group opened in recent years — often higher-end residences with lots of amenities — are almost fully occupied and command big prices, he said.

Homeownership rates nationally are at record lows, he said, partly because more people who can afford to buy are choosing to rent instead.

“They’ve seen the swings in real estate prices … and they like the flexibility afforded by being a renter,” Egbert said.

The southwest’s fast-paced growth started around the early 2000s when the Beltway expanded, offering freeway driving instead of dusty back roads. Investors flipped land and built properties, but work ground to a halt when the recession toppled the valley, leaving the southwest a checkerboard of open desert, finished projects and abandoned construction sites.

“Nobody was doing anything,” CBRE broker Greg Tassi said.

Projects got stuck on the drawing board, too, including Station Casinos’ Durango Station resort on Durango Drive just south of the Beltway.

In September 2008, less than two weeks before investment firm Lehman Brothers collapsed, helping to trigger the U.S. financial crisis, Station spokeswoman Lori Nelson said the resort tentatively was scheduled to open in 2011. “The plans are done, they are ready to go, and it will really be contingent on timing based on the economic conditions,” she said at the time.

Today, the land is undeveloped, and a Station sign there advertises plans for a 120,000-square-foot casino with 1,000-room hotel. The sign also warns “No Dumping — No Trespassing.”

Nelson said this month the company has no development timeline for the site.

At the peak of the bubble, land in the southwest valley frequently sold for $1 million an acre. Today, listing prices are a fraction of that but rising, typically ranging from about $300,000 an acre to $700,000 per acre, Gragson said.

One line of business that boomed with the Beltway was home construction. The southwest has been the top submarket in the valley ranked by homes sold for about 10 years, Home Builders Research President Dennis Smith said.

Builders sold 2,016 homes there last year, a third of all new-home sales in Southern Nevada, he said. The second-best market, the northwest, had 1,520 sales.

Perhaps the biggest project in the southwest before the freeway expansion was developer Jim Rhodes’ sprawling Rhodes Ranch community on South Durango Drive at West Windmill Lane.

“It was considered to be out in the middle of nowhere,” Smith said. “But the Beltway changed that.”

Source: http://vegasinc.com/business/real-estate/2015/apr/13/developments-southwest-valley-rise-after-years-del/

Investors Purchase Nearly 360 Acres at BLM Auction, 240 Acres Unsold

Last week, Southern Nevada investors purchased nearly 360 acres of low-priced government land at an auction conducted by the U.S. Bureau of Land Management, held at North Las Vegas City Hall.  Despite the  auction’s competitive pricing, 240 acres of land remained unsold.

According to the U.S. Bureau of Land Management, 357.6 acres sold for $19.2 million, or about $53,700 per acre, as part of a 597.6-acre offering.  The portfolio was offered at no less than $29.7 million total, or $49,700 per acre, with parcels ranging from 1.25 to 247.6 acres.

The land was scattered around the valley, including north of Blue Diamond Road in southwest Las Vegas and east of the Lake Mead Parkway-Boulder Highway intersection in Henderson.

BLM auctions such as this one are a source of raw land for Las Vegas homebuilders, whose business is picking up steam this year after falling hard in 2014.  Many of the buyers at the sell-off included builders KB Home, American West and D.R. Horton.

It’s unclear why a large portion of the portfolio didn’t sell.

BLM spokeswoman Kirsten Cannon said the agency did not hear any reasons for the unsold parcels, as every parcel up for sale is nominated by investors who want to buy it or by municipal officials who want it developed.

“There’s always a level of interest,” she said.  And the prices were far below market average.

In the first quarter this year, investors bought 899 acres valleywide for $170.6 million, or $189,766 per acre, according to data from brokerage firm Colliers International.

One buyer today, identified by the BLM as Sao Tome LLC, bought the 247.6-acre parcel for $1.85 million, or just $7,472 per acre. It could not immediately be learned who is behind the company.

Overall, builders sold 1,378 new homes in Southern Nevada in the three months ended March 31, up 8 percent from the same period last year, according to Las Vegas-based Home Builders Research.

The median sales price of March’s closings was $312,204, up 9 percent year-over-year. Builders also pulled 1,849 new-home permits in the first quarter, up 34 percent from the same time last year.

Dennis Smith, president of Home Builders Research, said last month the housing industry “is improving from its ‘OK’ performance” most of last year, when sales volume plunged 18 percent from 2013, prices were volatile and construction plans tapered off.

The uptick in sales this year is “not a huge change,” given Las Vegas’ usual volatility, but it’s “still a positive, upward movement,” Smith said.

Source: http://vegasinc.com/business/2015/may/05/investors-buy-almost-360-acres-blm-auction/

Large Private Equity Firms Among Most Active Buyers and Lenders for Commercial Property

Major private equity firms are increasingly pursuing a dual-track commercial real estate (CRE) investment strategy as they remain among the most aggressive buyers of commercial property and most active lenders in the market.

American Realty Capital, Blackstone Group, Colony Financial, Northstar Realty Finance, and Starwood Capital have originated more than $1.8 billion in CRE loans in the last five months. All of them have also been making headlines with their property buys.

For example, Blackstone Group recently agreed to acquire Chicago’s Willis Tower (the former Sears Tower) for $1.3 billion. At 110 stories, the 3.8 million square-foot office building in downtown Chicago is the second-tallest office building in the country.

Blackstone has also been active on the lending side. In Q4 2014, the private equity giant closed eight loans totaling $781 million. The largest was a $181 million loan on a New York City condominium project.   In Q1 2015, Blackstone has originated another $315 million in loans.

“We have an additional $1 billion of loans with agreed terms that we expect to close over the coming months and our pipeline remains active, reflecting strong borrower demand and our ability to succeed in an increasingly competitive market for senior mortgage loans,” Steve Plavin, president and CEO of Blackstone Mortgage Trust (Blackstone Group’s public held mortgage banking REIT), told investors last month.

Private equity firms like Blackstone are targeting the bigger deals on which to make loans where they think they offer an advantage over bank consortiums.

“The banks often look to syndicate bigger exposures, which limits their ability to commit quickly and efficiently,” Plavin said. “With our increased scale and Blackstone real estate affiliation, we are strongest on bigger deals. The larger loans have the added benefits of better institutional sponsorship and higher quality real estate collateral located in stronger gateway markets.”

The average size of loans Blackstone has closed since the start of the fourth quarter is $148 million as compared to $89 million to its existing portfolio heading into the fourth quarter.

Unlike banks, Blackstone and other private equity lenders are focusing on short-term transitional lending. The three largest U.S. loans Blackstone has made in the last five months all have 3-year maturities as compared to a typical 10-year maturity generally offered by banks.

Starwood Capital Group, with more than $42 billion of CRE assets under management, is also active on both the buying and lending fronts. This past week, Starwood Capital closed on its 10th opportunistic real estate fund at $5.6 billion, its largest fund to date.

Starwood Global Opportunity Fund X is off to a strong start. The fund has already closed or is committed to $6 billion worth of transactions- roughly split equally between real estate investments in the U.S. and in Europe.

Its acquisition deals include the $1.2 billion purchase of TMI Hospitality, one of the largest owners, managers and developers of select-service hotels in the country, with 184 operating hotels and more than a dozen in the development pipeline. It also has a pending acquisition of a prime suburban office portfolio totaling almost 7 million square feet in fast growing areas including Raleigh, NC, Nashville, TN, South Florida and St. Louis, MO, for a purchase price of $1.1 billion.

On the lending side, Starwood’s mortgage lending arm, publicly held Starwood Property Trust Inc., has originated or co-originated nearly $835 million in loans. Among its most recent loans was a $201 million first mortgage and mezzanine loan for the acquisition and recapitalization of a 49-story and a 23-story office tower complex in Chicago; a $200 million first mortgage and mezzanine loan for the acquisition of a office buildings, a sports club and a 294-room hotel in Dallas/Fort Worth; and a $120 million first mortgage and mezzanine loan to refinance two office buildings in New Orleans, one of which includes a new 195-room hotel.

It also co-originated a $224.5 million first mortgage and $74.8 million mezzanine loan for the refinancing and redevelopment of two office buildings located in New York.

Looking forward, Starwood said it continues to have a strong pipeline of high-quality transactions that meet its criteria.

“You will see us probably do more in the core space, core-plus space, value-added space and the equity and will grow as a percentage of our assets. It’s in our pipeline in several transactions,” Barry Sternlicht, chairman and CEO of the REIT told investors last month.

Despite the dwindling supply of distressed property, Sternlicht says he still sees opportunity iin that sector.

“I’m particularly looking forward to the maturity of the 2016 and 2006 and 2007, 10 years legacy CMBS investments. They should provide further growth and opportunities for us, both to buy assets out of trust and also to lend, then refinance and restructure the loans that are coming due,” said the Starwood chairman.

Additional recent private equity CRE lending highlights include:

  • Colony Financial Inc. in the fourth quarter originated 10 first mortgage loans and four mezzanine loans totaling $328 million within its transitional CRE lending platform. It also originated a $77 million first mortgage acquisition loan on a 2.5 acre land parcel in San Francisco. And in February, it agreed to fund up to $80 million of preferred equity to recapitalize a primarily stabilized multifamily portfolio of 16 communities with 4,800 units in Georgia, Texas and Louisiana.
  • Northstar Real Estate Income II Inc., which originated an $84 million senior loan on a Class A office complex Irving, Texas, a $41 million senior loan on a state-of-the-art data center in Norwalk, Connecticut, and a $42 million senior loan on a Marriott-branded full-service hotel located in Coraopolis, Pennsylvania.
  • Realty Finance Trust Inc. (formerly: ARC Realty Finance Trust), an affiliate of American Realty Capital, originated a $38.5 million loan on Denver Highlands, comprising 362,234 square feet of office space at 10065 & 10375 East Harvard Avenue in southeast Denver, Colorado.

To learn more about commercial real estate investing and current investment opportunities, please contact Antone and Stacy Brazill.

Source: http://www.costar.com/News/Article/Big-PE-Players-Among-Most-Active-Buyers-and-Lenders-for-Commercial-Property/169789

Report on Nevada’s Housing Market: Southern Trends

Nevada’s housing market remains in the spotlight of real estate news, with the Southern Nevada market showing some of the strongest levels of consistent growth.

According to a recent report, co‐presented by the Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas and the State of Nevada Department of Business & Industry, all three regions in Nevada saw decreases in both new and existing home sales.

Based on January, 2015 statistics, existing home sales in Nevada decreased by nearly 10 percent and were the lowest they had been since 2008. New home sales decreased by nearly 5 percent, but are still up 3 percent year over year.  The share of homes sold under distress in Nevada increased by 2 percentage points. However, this large increase was a result of the decreased number of home sales, not an increase in REO or short sales. The total number of REO sales remained unchanged in January and short sales saw a 24 percent decrease throughout the month.  Additionally, average new home prices in Nevada continue to increase as Southern Nevada continues to see consistent growth in average new home prices.  At $336,607, average new home prices in Nevada are the highest have been since June 2008.

Here is some additional information about the Southern Nevada housing market:

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Nevada’s Housing Market | January 2015 | Southern Trends

 

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Las Vegas Valley Home Values

The Las Vegas housing market continues to show signs of improvement.  According to a recent report issued by SalesTraq, the median price of homes sold throughout the Las Vegas valley increased in every zip code, year-over-year, 2013-2014.

The following map shows the percentage increase by zip code.  The percentage reflect the change in median price of homes sold during 2014 compared to 2013.

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Seven Tax Code Changes Taking Effect in 2015

http://www.thebrazillteam.com

As we begin preparing our documents for our 2014 tax filings, it’s important to begin prepping for the upcoming tax year.

While gathering documents for the past year’s taxes is definitely the top priority this time of year, equally pressing is the need to adjust your budget to account for changes in the tax code that took effect on New Year’s Day as the new year brought a variety of changes in the tax code.

Here are seven big changes that will affect a large number of taxpayers in 2015:

Tax Brackets: For the new tax year starting in January, income tax thresholds have again been adjusted up for inflation. The highest tax rate of 39.6%, for instance, will now apply to single filers who make over $413,200 and married couples making $464,850. Both figures are up about 1.6% from tax year 2014. For more information on specific income tax brackets by filing status, check out the latest IRS revenue procedure document.

IRA Rollovers: Starting in 2015, you can only make one single rollover from an IRA in a 12-month period. This is a bit tricky, because you can still make as many “trustee-to-trustee” transfers as you wish, moving your money directly from one provider to another. What the new IRS rule targets is the practice of withdrawing all those funds and then re-depositing them in a new account – a tactic some folks were using as a short-term, interest-free loan. To protect yourself, limit all rollovers to direct transfers in 2015 if you plan on moving money more than once.

AMT Changes: The so-called “alternative minimum tax” is quite a headache for many middle-class Americans. Since certain breaks can significantly reduce your tax bill, the IRS created the AMT to set a limit on those benefits – and ensure a minimum tax burden on you. The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 for individuals or $83,400 for joint filers. That’s up slightly, about 1.5% from 2014.

401(k) Limits: The limit on employee contributions to a 401(k) plan will increase to $18,000, up $500 from 2014’s cap. That means you tell your payroll department to adjust up your contribution starting on the first of the year to ensure you save the maximum allowable in 2015. Also, the “catch-up” allowance for those over than 50 has also been increased, allowing for an additional $6,000 in contributions instead of the $5,500 cap previously. These new contribution levels are also applicable to 403b accounts and most 457 retirement plans as well.

Flexible Spending Account Limits: The annual limit on employee contributions to flexible spending accounts is now $2,550 for qualified health care expenses. That’s up $50 from 2014, so make sure you opt in for this new maximum amount if you take advantage of a health care FSA.

Standard Deduction: The standard deduction – that is, the basic tax break extended to all Americans each year — rises to $6,300 for single filers and $12,600 for married taxpayers filing jointly in 2015. That’s up $100 and $200, respectively, from 2014 figures. The standard deduction is crucial to tax planning and withholding, because if you cannot itemize enough deductions to surpass this amount, this is the only tax break the government will likely be giving you on next year’s tax return.

Health Insurance Penalty: Part of the Affordable Care Act mandates that all Americans have health insurance, or pay a tax penalty as a result. In 2014, the penalties are 1% of your household income or $95 per person – whichever is greater. But in 2015, those penalties ramp up significantly to 2% of total household income, or $325 per person. That can really add up for a middle-class family of four. If you’re not covered and paying a penalty on your 2014 taxes, make sure you get health insurance ASAP to avoid penalties as we enter a new tax year in January.

To discuss whether these tax changes will affect your real estate portfolio or property values, please contact Stacy or Antone Brazill.  To learn more about the tax code changes themselves, please contact your CPA or tax service provider.

Source: http://www.usatoday.com/story/money/personalfinance/2014/12/19/taxes-2014-w-2-retirement/19903221/

2015 State Business Tax Climate Index

StateBizTax

There are many tax benefits to living and conducting business in the state of Nevada!  In fact, Nevada ranks third among the Tax Foundation’s State Business Tax Climate Index!

The State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems, and provides a road-map to improving these structures.

The 10 best states in this year’s Index are:

  1. Wyoming
    2. South Dakota
    3. Nevada
    4. Alaska
    5. Florida
    6. Montana
    7. New Hampshire
    8. Indiana
    9. Utah
    10. Texas

The absence of a major tax is a common factor among many of the top ten states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax. Wyoming, Nevada, and South Dakota have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.

But this does not mean that a state cannot rank in the top ten while still levying all the major taxes. Indiana and Utah, for example, have all the major tax types, but levy them with low rates on broad bases.

The 10 lowest ranked, or worst, states in this year’s Index are:

  1. Iowa
    42. Connecticut
    43. Wisconsin
    44. Ohio
    45. Rhode Island
    46. Vermont
    47. Minnesota
    48. California
    49. New York
    50. New Jersey

The states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates. New Jersey, for example, suffers from some of the highest property tax burdens in the country, is one of just two states to levy both an inheritance and an estate tax, and maintains some of the worst structured individual income taxes in the country.

Nevada

The state of Nevada does not have a state income tax and has no business income tax.  In addition, the state does not impose estate, franchise, gift, or inventory taxes.  There are no taxes on corporate shares either.  Additionally, there are limited property tax increases and the real estate market is on the rebound.

Las Vegas has been rated as one of the top 10 best places in the country to start a new business, according to a study by WalletHub.com. Reasons listed included low corporate taxes, hard-working employees, and a variety of industries.
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Sources:

http://taxfoundation.org/article/2015-state-business-tax-climate-index

http://www.lasvegasnevada.gov/files/Las_Vegas_Business_Fact_Sheet.pdf