Vail Homes

Eagle County property owners knew their valuations had gone up several months ago. Every two years the State of Colorado requires Counties to re-assess local property values to reflect current actual valuations. Counties carry out this task and notify property owners of their actual valuations at the end of the appraisal period. These property owners then have a period of time to contest their valuations. No one was surprised to find that valuations have risen dramatically over the last two years in Eagle County - in some cases as much as 40% to 50%.

The problem came home to roost last month when tax bills were sent out. While most owners knew their valuations had gone up dramatically, the common understanding was that actual property tax increases were limited by state statute to a small percent per year due to a bill past several years ago by representative Doug Bruce. The “Bruce Bill” limited increases in tax collections to a small percentage per year no matter how much the actual valuation increased. Unfortunately, individual counties were given the the right to “De-Bruce” their tax billings by public vote and many counties, including Eagle County had off-year referendums authorizing this “de-bruseing”. Many voters did not understand the ramifications of approving these referendums - in fact, there are now no limits to how much the individual taxing districts can raise their individual mill levy requests. Thus, many local property owners are facing property tax increases of over 40% this year. Painful as it is to most local property owners, Eagle County Property Taxes are still very reasonable when compared to many other parts of the country.

For more information, please see the following link: http://www.vaildaily.com/article/20080218/NEWS/618114539

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The legality of performing an IRS Section 1031 Exchange for your vacation home has always been a big gray area. The general rule for a successful 1031 exchange is that both the acquired property and the relinquished property must either be held for investment or productive use in a trade or business. While many second home owners rent their properties and technically have been holding them with the expectation of investment return, the personal use by the owner has thrown doubt as to Section 1031 qualification.

Now, according to a new release prepared by Marvin A. Kirsner, Greenberg Traurig LLP, Boca Raton, FL (561-955-7630) and forwarded to me by Jame Mikes, under this new Safe Harbor ruling, second homes would be i for 1031 exchange treatment if:

1. The property has been held for at least 2 years

2. The property as been rented at fair market rental value for at least 14 days per year during this ownership period.

3. The taxpayer’s personal use does not exceed the lesser of 14 days per year or 10% of the number of days the property is rented to others.

These safe harbor requirements apply to both the the relinquished property and the acquired property so beware: if the acquired property is not used per these regulations during the future period of ownership, the taxpayer is required to file an amended return disallowing the 1031 status!

As with all IRS rulings, there are many intricate interpretations of this new Safe Harbor so be sure to contact your personal tax consultant for advice to be certain your transaction crosses all “T’s” and dots all “I’s”. While the Safe Harbor delineates only limited personal use, it does, for the first time, provide some clarity to a question that was often interpreted many different ways.

Please feel free to contact me for a copy of Revenue Procedure 2008-16 which documents the new Safe Harbor.

John Nilsson

According to Treavor Thelke, Land Title Guarantee, 2007 Eagle County real estate sales reached nearly $3 Billion, setting an all time record and surpassing the previous record set in 2005 by more than $160 Million. In addition, 2007 sales totals exceed the highest overall sales price ever in Eagle county with the average price for all transactions at $1,101,375, nearly 25% over last years average sales price!

In depth analysis of the the statistics, however, shows some developing trends that mirror the wider national market.

1. While the dollar volume reached an all time high, the overall number of transactions were 2,688 - the lowest since 2003. This tells us that the upper end of the market is where the strength is - helped along by 96 transactions over $4 Million. The lower end of the scale has slowed.

2. Most of the year 2007 gain occured in the first 6 months of 2007 where the numbers showed marked dollar volume increases over 2006 corresponding months of between 117% to 169%. The last three months of the year showed a dramatic monthly decreases in dollar volume over 2006 at 92%, 72%, and 81% respectively - a definite indication that the real estate market cooled in the last three months of the year.

IN SUMMARY: 2007 was a record setting year in the Valley for real estate sales - a result of a very, very hot 1st quarter and high demand for the upper end properties. The lower end of the market (under $3,000,000) slowed significantly throughout the year. It appears that the first quarter of 2008 will show a continuation of this trend.

Please feel free to contact me for more discussion on this subject and specific backup for my conclusions at 970-390-7600.

VAIL, COLORADO – Sonnenalp Real Estate is offering the first Arrabelle at Vail Square residence ready for occupancy, providing an inside look at the highly anticipated project. The five-star hotel and residence complex, which opened in late December, represents the highest level of luxury and convenience, and combines the elegance of Europe’s grand resorts with Vail’s alpine heritage and world-class style.

The residence features an expansive four-bedroom, four and one-half bath floor plan, with over 3,800 square feet of living space and European-style finishes. Seven outdoor patios overlook the activity of the village—the ice-skating rink, water features and fireplaces. Residents can enjoy an intimate dinner in the private owner’s lounge, which features ski slope views and food from Centre V, the hotel’s in-house French brasserie. “Everything is so convenient,” says current owner Steve Slaughter. “I can go for a quick walk and pick up wine for dinner, or just grab a cup of coffee from the new Starbucks.”

Located in the heart of the newly developed Vail Square, The Arrabelle sets the standard in luxury alpine resorts. The hotel reflects the romantic heritage and ambiance of the European Alps, architecturally inspired by cities such as Innsbruck, Prague and Salzburg. It features 36 guest rooms averaging 550 square feet each, approximately 50 additional condominium lock-off units, a location steps from Vail’s Eagle Bahn gondola, a RockResort Spa and fitness center, and a variety of first-class amenities, ranging from rooftop pools and fine-dining restaurants to ski and boot valets.

The hotel’s dedicated, professional staff is available to make sure that every guest’s stay is as comfortable and enjoyable as possible. A personal concierge, located on each floor, ensures that every need and desire is met—no matter how large or how small. From ordering morning coffee and arranging daily activities to securing last-minute dining reservations, a personal concierge is available 24 hours a day.

Listing broker Donna Caynoski asked concierge Justin what he offers guests and owners. “I simply ask them to describe their perfect vacation to me with every detail,” he said. “Once they offer this, I am off to make sure all of those details are fulfilled.”

Sonnenalp Real Estate is a recognized leader in the luxury real estate market, representing buyers and sellers of the Vail Valley’s most distinctive properties. Its exclusive affiliation with Christie’s Great Estates—a subsidiary of Christie’s International—provides worldwide reach to affluent clients on six continents.