Long Island lawmakers have proposed legislation that would prevent many affluent homeowners in destinations like the Hamptons from higher taxes, according to the Wall Street Journal. The bill, the Journal said, comes in response to a growing concern that a recent New York tax tribunal ruling could discourage out-of-state residents from purchasing in New York State.

In January, a tribunal concluded that all income earned by a Connecticut couple was subject to taxation in New York because they spent more than 183 days a year in the state.

The new law would offer tax relief to vacation homeowners who work more than 50 miles from their property. “If your vacation home is that close to your employment, there’s a likelihood that you’re using it for more than a vacation home,” said Robert Spielman, a certified public accountant with Marcum LLP in Melville, N.Y. [more]

It should come as no surprise that homeowners are often tempted to stretch the truth when they’re trying to sell a property that’s already been sitting on the market for several months. But buyers beware: the troubled housing market is exacerbating the prevalence of little white lies like overstating a property’s size or understating taxes and utility bills, and many state disclosure laws don’t apply to bank-owned homes, which represent a burgeoning share of the inventory. In more than 30 states, sellers are required by law to disclose potential problems with their homes like leaky roofs, the presence of radon gas, among other nuisances, but a grey area exists in issues that the seller might not know about, or chooses to forget. Common fibs collected by the Wall Street Journal from real estate agents and regulators deal with property dimensions, pest problems, floods, taxes, and noise. For buyers of new homes during the housing boom, many were also duped by builders’ promises of amenities like clubhouses and golf courses that never came to fruition after the money ran out. [WSJ]

From the April issue: Call it the third rail of the federal tax
system: the politically untouchable cluster of special benefits and
subsidies set aside exclusively for homeowners, including deductions
for mortgage interest, local property taxes and capital gains
exclusions on up to $500,000 in sale profits. Is the Obama
administration serious about beginning to clamp limits on at least some
of these subsidies? The administration isn’t commenting on anything
beyond what was proposed in its first budget, submitted at the end of
February, but housing and banking trade groups are worried that the
initial proposal to cut back on the ability of upper-income families to
write off mortgage interest and other expenses is just the opening move
in a longer-range effort to reform the federal tax code. [more]