How will the fiscal cliff resolution impact Denver Real Estate? It seems like all we heard about on the news for months was the Fiscal Cliff. Now that there seems to be a resolution, at least for the time being, I thought it would be helpful to take a look at what the compromise means for the Real Estate market in Denver in the coming years.
The first positive to come of the resolution is the extension of the Mortgage Forgiveness Act. If this hadn't been extended, principal balances written off by lenders to help homeowners with underwater mortgages would have been treated as ordinary taxable income. This would have seriously reduced the number of successful short sales we are seeing and would have led to more foreclosures on the market. With foreclosures in Denver nearing an all time low, this could have potentially stalled our market that is flourishing right now.
This bill also re-established the deduction for mortgage insurance premiums for 2012 and 2013 for people with adjusted gross income below $110,000. This is a big deal for first time home buyers who are helping to drive our market forward right now, so an important incentive to be kept.
Another important factor that remains intact are the tax credits to homeowners who make energy efficient home improvements in 2013. These credits are offered to new builders as well which should hopefully help drive the Green building movement that Denver is getting known for.
And most importantly, for the time being, tax deductions for mortgage interest paid and property taxes remained untouched. These two factors contribute heavily to making it cheaper to own than rent in Denver right now and all the more reason to get into the market before it really takes off.
The first positive to come of the resolution is the extension of the Mortgage Forgiveness Act. If this hadn't been extended, principal balances written off by lenders to help homeowners with underwater mortgages would have been treated as ordinary taxable income. This would have seriously reduced the number of successful short sales we are seeing and would have led to more foreclosures on the market. With foreclosures in Denver nearing an all time low, this could have potentially stalled our market that is flourishing right now.
This bill also re-established the deduction for mortgage insurance premiums for 2012 and 2013 for people with adjusted gross income below $110,000. This is a big deal for first time home buyers who are helping to drive our market forward right now, so an important incentive to be kept.
Another important factor that remains intact are the tax credits to homeowners who make energy efficient home improvements in 2013. These credits are offered to new builders as well which should hopefully help drive the Green building movement that Denver is getting known for.
And most importantly, for the time being, tax deductions for mortgage interest paid and property taxes remained untouched. These two factors contribute heavily to making it cheaper to own than rent in Denver right now and all the more reason to get into the market before it really takes off.
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