Tax Incentives Will Not Affect the Housing Market
In 2014, there are no tax incentives benefiting residential real estate that are set to expire. The most significant tax incentive is the Homestead Exemption, which is affected by the date of purchase (it must be purchased the year prior to the request for exemption). Since local exemptions for 2013 expire on Jan. 1, this means that buyers in 2014 will now need to wait until Jan. 2015 to file. But this is not expected to affect buyer demand drastically.
“It’s usually more of an incentive for them to close before the end of the year if they’re looking anyway, but not the reason they’re purchasing,” Martin says. “It’s not a huge savings (maybe 20 percent or so on county taxes), so we aren’t talking more than a couple thousand dollars or so.”
Some were worried about a 3.8 percent tax on home sales, which was mentioned in the Affordable Care Act. The tax was found to exist, but only affects a small percentage of the population.
“The tax is based on a long-term capital gain,” Wolff says. “It’s based on investments only, so your homestead is not affected unless you exceed the current IRS guidelines for your home purchase.”
Interesting article, but it would be prudent to at least mention the factors which are driving demand, particularly since some of them are neither organic or sustainable. It appears you don’t appreciate (or don’t understand) the real factors driving the current demand and asset inflation in our real estate markets. With the Fed’s balance sheet at $4 trillion and climbing, and TX oil production going parabolic, it’s pretty easy to see why demand is as robust as it is. The real problem is that neither of these two phenomena are sustainable. This particular statement caught my attention:
“With Houston’s strong economy and low unemployment rate, there are not many factors that would hinder buyer demand either.”
I would argue that we are witnessing unprecedented asset inflation to keep a corrupt banking sector afloat. At the same time, we’re making homes unaffordable for a large percentage of the population. If that’s your idea of progress, then by all means let the good times roll. Personally, I’m advising my clients to take a more cautious, realistic approach in our current real estate environment. While the 2008 housing collapse may be behind us, the next one is creeping up in the rear-view mirror. This time is not different. It’s just a different verse of the same song because none of the real problems in the economy have been solved; they’ve just been papered over.
“Debt that can’t be paid won’t be paid.”
http://aaronlayman.com/houston-tx-housing-bubble/
You cannot do a short sale until you’ve adelary missed payments. If you are up to date on your mortgage, the bank has no reason to worry and therefore will not accept a short sale. The bank knows you can still make the payments because you still are, and will expect you to continue to fulfill your end of the bargain. If you do fall behind on payments, you have to have a good reason why. Such reasons might be a death in the family, loss of job or an injury that has kept you from working. A short sale protects the owners credit when the borrower can no longer make the payments. In that event, the bank realizes it’ll take many more months to wait to evict you and sell it themselves than if they cooperate with you and allow you to retain possession of the house while they sell it. The bank takes the financial hit and pays all the fees in the sale of the property, but in turn, the owner is not entitled to any equity that has built up on the property.If you have absolutely no equity in the house and just want to get rid of it, you might want to do research or talk with a lawyer about a quitclaim deed. With that deed, you sign off all your rights to someone else and they take on all the responsibility you once had. If nobody you know wants the property, I’m sure there are investors who will be more than happy to take it off your hands, rent it out and wait a few years for the market to rise. Then, you can move on to a less expensive house free from the hassle of your overpriced property.I am not a lawyer and not qualified to give legal advice, so please speak with an attorney about your options. Some of them may give you some quick advice over the phone without charging you. Good luck