Real estate and the economy are on people's minds during this election season. The Presidential ad campaigns are in full swing (don't we know it down here in the sunny swing state of Florida), the economy is creeping back but is definitely not booming, and now you may be looking to buy or sell real estate. The question is whether you should wait until after the election to make the leap, or do it now? It's a good question, and here's a look at what could be coming to help you decide.
Tax policy is a big issue. Democrats have said that they are not in favor of keeping existing tax cuts in place, for varied reasons. Republicans want tax cuts to stay and become permanent. Whether they will remain can make a difference in the decision to purchase real estate. If Obama wins, the temporary tax cuts will not be extended beyond this year. He’s constantly saying this in speeches, and his record shows that he is in favor of raising taxes versus cutting spending. If Romney wins, he says he will extend the cuts and try to make them permanent.
Some of those tax cuts revolve around how you can deduct the costs of buying real estate, as well as the cost to maintain a loan to make the purchase. Any homeowner will tell you that the deduction on their taxes for mortgage interest is a big deal. Depending on how new the loan is, or more accurately how much of your montly payment is being applied to interest vs. principal, that figure can be a large one. Even an 8-10 year old loan of $200,000 can mean a deduction of over $10,000 in a year. Depending on your income, that is a substantial reduction in what you will be required to pay in income taxes.
So the decision to buy real estate is probably a good one to make now. Any cuts will be in place for at least a year, and if you purchase smart and within your budget, home ownership is never a bad idea!
If you are outside the area and wondering about the local Tampa Bay real estate market, please feel free to give us a call today to find out more. With the exception of the political ads, Florida is a great place to have a main or second home and the time is still right to buy (before prices go to farther up!). We are happy to talk to you about the Florida real estate market and work with MANY out of towners...:) Julia Fishel 727-366-0324