Debts debts debts! What to do if you are a spend happy legislature in the Golden State of California? You mandate State taxes be witheld for out of state property owners. Starting January 01, 2010 the State of California is requiring all property managers to withhold .07% of the rental income received for clients who have rental property in California but do not live inside California. Some exemptions apply--they encourage you speak to a competent real estate tax professional. Taxes have always been due (and much income derived) from out of State investors who have locally managed rental property. This new law requires the agents of these investors to hold onto--and pay--the .07% income tax to the State on a quarterly basis. Our company Homepointe Property Management has already received cancellation of management letters from out of State investors who refuse to play along. Not only are we the property managers losing business but I would wager that the State of California will lose more once investors wise up and decide to invest in other investment friendly States.
James Safonov
Homepointe Property Management
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