Every industry has its own vocabulary, and real estate is no exception. If you are beginning to search your first home purchase, or it’s been a while since you last purchased a home, you may find yourself stumped by the lingo, acronyms, abbreviations and jargon commonly used in real estate sales materials, online listings, contracts and the like. We do not want you to be confused, so in this series of posts, we will define several terms in everyday language. Abatement is one real estate term or expression with which to become familiar.
In general legal terms, the word abatement means removal or diminishing of something. In residential real estate, the term most refers to property tax in the form of a property tax abatement. Since property taxes are ongoing annual homeowner expenses even after you pay off a mortgage, having access to a property tax abatement or real estate abatement is a valuable savings when buying a home. For example, if a city, county, state or other property-tax entity offers a tax abatement, it could reduce the monthly housing costs by up to 3% during the abatement period.
Property tax abatement programs make it easier to qualify for a mortgage by reducing your income/debt to housing cost ratio. In addition, as long as the abatement continues in effect, it adds to the attractiveness of your home when you decide to sell.
Certain abatements are for one-time improvements to an existing property can vary widely depending on the area. They can be for upgrades or enhancements as different as:
Improvements must conform to the abatement requirements, building codes and permitting processes, so if you are planning to purchase a home that you intend to renovate, make sure that we know so that we can advise you on the abatements in effect for the properties that we show you.
In addition to state and local abatements, there are some federal tax incentives for restoring and preserving homes designated as historic of historical civic value. Other abatements are for qualified newly constructed homes.
Some cities have property tax abatements in effect for years. These most often are set in place to attract buyers to neighborhoods or areas that are under redevelopment, in the process of revitalization, or have lower demand. The specific qualification requirements for abatements differ from area to area, so be sure to talk with us about access to potential abatements when you are house hunting.
Asbestos and Lead-Paint Abatement
Other uses of the word abatement relating to real estate include certain expenses associate with buying older property, or property being repurposed from commercial to residential. For example, when purchasing a home built before 1978, any renovations or improvements to a home might need to conform to lead paint abatement requirements. Another potential abatement cost is asbestos removal. Prior to the 1970s, asbestos was used as insulation in ducts and pipes, as vermiculite attic insulation, in wall and ceiling acoustical tiles, concrete exterior siding, floor tiles and other common home materials containing asbestos. The Environmental Protection Agency regulates asbestos removal, so if you plan to make changes to an older property, we can help you navigate the ins and outs of asbestos abatement and recommend qualified professional asbestos removers. Certain homes may qualify for an asbestos or lead paint removal grant.
Call us …
In Corona del Mar and other beach cities of Orange County, many attractive and well placed homes may have been built prior to the above mentioned dates. We can help you determine whether the home you’re interested in qualifies for tax abatements and asbestos or lead paint abatement grant programs. Be sure to ask about this when you call. We look forward to offering you professional and accurate answers to these valuable questions about abatements.