Okay, you listened to my thoughts on the fiscal cliff earlier this week. I must say, I stayed up late to watch C-Span and the nice music while the votes were being tallied.
I know my wife thinks I’m crazy for watching politicians who look important, and seem to do very little. What I did find out about the Tax Bill Passed and how it effects us the simple folk in the Real Estate Market.
Taxpayer Relief Act of 2012 extends and most of us will see no change, Unless you earn more than $400,000 as and Individual, and $450,000 as a (Household), than you will see taxes revert as they were in 2003, taxes would increase from 35% to 39.6% for those earning more than mentioned above.
Capital Gains tax will remain the same for most of us 15%, unless you make $400,000(Ind)-$450,000 (household)above this it goes to 20%. Good news from a homeowners point of view, excluded from taxes of gains on the sale of a principal residence of up to $500,000 remains intact, so only home sellers whose income is $450,000 and above, and gains on the slae of their home is above $500,000 would pay taxes on the excess gains at the higher rate 20%. So, Most of us will see no change on the taxed rate of the sale of homes.
Another is the Mortgage Relief Act of 2012 will extend, Seller of a home that sells for less than their current balance of the Mortgage , the difference may be forgiven and not taxed to the seller and cause more financial burden.(Example, Short Sale or Foreclosure)Also extended are the deductions most of enjoy when we purchase a home with a Mortgage are the state and local property tax, as well as the Mortgage Interest, and Mortgage Insurance premiums. All these that some of us thought may be on the chopping block.
So go out and buy that dream home for yourself and enjoy the deductions and rewards of home ownership. Its a great time to buy or invest in Real Estate!
Now we can breath a little easier tonight, and feel good about the Real Estate Market for 2013. If this information is helpful great, if not .. Read it again while sipping on a glass a wine and enjoy!
The Kniffin Team Real Estate Professionals