Thursday, December 13, 2007

Home Ownership and Property Taxes

Lucas Eberlee
Mayor and Spokes Sim

Home Ownership and Property Taxes

Home Ownership Rights (HOR) can be bought, sold or inherited only by Settled-In Sims. City Council holds all Home Ownership Rights and all purchasing transactions are made through this office. In other words, to purchase a home, you would go through the City Council. Any Sim can own a home no matter how much it's listed for, if they purchase a Home Ownership Right and they have 10% of the listed price of the property to put down, then they can purchase that lot. The remaining portion of the mortgage is paid in property taxes every 7 simdays for the duration of the buyer/buyer's family living on the lot. Property taxes will always be due every 7th simday, no matter if the mortgage is paid off.

If and when a mortgage is paid in full, the property tax will be reduced to $700, due every 7th simday. Also, the Home Ownership page will be updated to declare that the mortgage is paid in full. The City Council will accept lump sum payments on mortgages when taxes are due, to get them paid down faster.

If a Sim moves before the mortgage is paid, and they have no Buyer to take over the mortgage, then they will have to pay the City Council the difference owed on the listing price. The City Council pays back their Home Ownership Right only, but keeps the 10% they originally put down.

Homeowner's Benefit: The homeowner will have to take responsiblity on some of the mortgage that is owed on the property, but will get their HOR back, so they at least have that to buy another house with.)

If a Sim cannot pay their property tax, they will have until the next period (the 14th simday by 6:00 p.m.) to pay 2 tax payments plus $100 daily late fee, plus 2% daily interest. If payment is not received at that time, they will be sent a foreclosure notice that will be displayed in their front yard, and they will have to sell their belongings in a public auction until the payment is fulfilled. The owner of the home will have to spend 2 days in jail.

If by some odd chance, payment could not be fulfilled through public auction, the household will have to move out of the lot, relinquishing all of their belongings and cars. The owner will spend 3 days in jail. And, the owner and spouse will not be able to purchase another Home Ownership Right -ever-, but they can rent. Their children and future heirs can rent or purchase a home if they so choose.

In order to sell a Home, a homeowner should have a Buyer, and conduct the sale through a Real Estate Agency. When the homeowner wants to move, they must contact the City Council and the Real Estate Agency.

The Council will pay out the homeowner's Home Ownership Right as an expense.

Council's benefit: (The City Council gains income from the property taxes, and it gains income from any Home Ownership Rights fees that are paid to them.)

The homeowner, getting back their Home Ownership Right money, will then give half of that Right to the buyer, and half of it to the Real Estate Agency (unless the realtor has other fees for their services which is decided before the sale of the home). OR, if there is no buyer, they'll use their Home Ownership Right money to buy another HOR...or not, if they plan on renting.

Homeowner's benefit: (The homeowner keeps their networth, which is the sum of all household value and the household's cash from the move, minus money owed on the mortgage (if they don't have a Buyer), but loses their Home Ownership Right, and must purchase a new one in order to buy another residential property.)

The Buyer will gain half the monies they need, and must already have the other half of the money they need in order to purchase a Home Ownership Right from the Council. Then they must register the property sale with the Archive Librarian.

Buyer's benefit: (The buyer only has to save up enough money for half of a Home Ownership Right, but they also must have the 10% of the current listed price of the home. Meaning: They pay 10% of the current mortgage balance, and take over the mortgage payments from there. If the mortgage is paid off, they pay 10% of the current listed price.)

The Real Estate Agency gains half the value of a Home Ownership Right as income for their agency; a other words. Unless the realtor states differently in their contract which is decided on before the sale of the house.



Selling the house to a Buyer before the Mortgage is paid off: A Sim finds a property listed at $30,926. Their Home Ownership Right is $10,000 plus 10%, which is $3,092. They can purchase and move into that home for $13,092.

($30,926 minus $3,092 = $27,834 (the amount mortgaged).

If they sold their home after living in it for only 30 simdays (6 payments), they would've paid $12,000 on the mortgage. (because the owner pays $2,000 property taxes due every 5 simdays.)

The new Buyer of the home would take over the mortgage at $15,834. Paying $10,000 for the Home Ownership Right plus 10% of the current mortgage balance, which is now...$1,583.00 The Buyer can purchase and move into the home for $11,583.

Selling the house to a Buyer after the Mortgage is paid off: Once a homeowner pays off their mortgage and sells their property to another buyer, the current listed price goes to...$34,018. (Which is the original listed price, [$30,926] plus the 10% put down to move in, [$3,092].)

In essence, property values can rise over time...with each new owner of the house adding their 10% amounts to its current listed price value.

If a homeowner loses their property due to default payment on taxes, the City Council retains the Home Ownership Right, and can either rent that property, bulldoze it, or donate it. Otherwise, another private sitizen will have to purhase their own Home Ownership Right to move into that property.

If any Sim, renter or homeowner, is a multiple time offender of the rules, they will no longer be able to rent or purchase property in Blueberry Bluff and will have to move elsewhere to live, that's right...emigrate.

In matters of Heirloom (see Inheritance Laws), an heir will just take over the house and continue the mortgage payments, if necessary, or pay the reduced tax every 7th simday.

No comments: