The U.S. House of Representatives voted 257-167 to pass the U.S. Senate’s plan to avert the ‘fiscal cliff.’ President Obama signed the bill into law. Congress agreed that current tax rates will stay the same for households that make less than $450,000 annually, and $400,000 annually for individual filers. This coupled with the fact that there will be no change to capital gains taxes, the National Association of REALTORS® (NAR) believes there will be no change financially for the vast majority of home buyers and sellers.
There are many facets that will affect each and every American’s pocket book, but we wanted to update you on a few key issues that affect the Real Estate market
- Congress excluded a capital gains tax increase for sale of a principle residence of up to $500,000 ($250,000 for individuals).
- The Mortgage Forgiveness Debt Relief Act of 2007 was extended. This provides relief to troubled borrowers when some portion of mortgage debt is forgiven. This averts the crisis many short sales were facing with the New Year.
- Congress extended deductions for mortgage insurance premiums, state property taxes, and local property taxes.
- The mortgage interest deduction was left untouched, continuing tax relief for homeowners.
Overall, this deal is seen as a positive for homeowners. For more information about the ‘fiscal cliff’ deal please click here. The folks at The National Association of Realtors deserve recognition for their diligence in advocating our issues throughout this crucial process, but their work is not done. Not all aspects of the fiscal cliff have been dealt with, and come February Congress will be required to re-engage the issue to deal with the national debt ceiling and required federal budget cuts.
Source – PRO, Pinellas Realtor Organization