A permanent patch to the alternative minimum tax, which could have left millions of middle class homeowners with higher taxes, was part of the final legislation. Other pieces of the bill that concern the housing agency include:
1. Mortgage Forgiveness Debt Relief -- this means that short sales will be able to continue without underwater amounts "forgiven" being taxed like traditional income.
2. Deductible Mortgage Insurance Premiums -- borrowers with an adjusted gross income under $110,000 per year will still be able to write of their PMI payments and guarantee fees along with their mortgage interest on their federal tax returns
3. Tax Credits for Energy-Efficiency Home Improvements and Tax Credits for Energy-Efficient New Houses -- Homeowners who install energy-efficient windows, insulation, and other upgrades designed to cut consumption in 2013 will be eligible for tax credits of $200 to $500. And builders and contractors can claim a $2,000 tax credit on new homes constructed in 2012 and 2013 that meet federal energy conservation standards.
There are a few negatives for the industry. Homeowners int he highest income brackets ($450,000+ per year, filing jointly) will face a 20 percent tax rate on long-term capital gains like those from investment real estate and home sales that gain beyond the $250,000/$500,000 threshold.
For more information on the specific affects of the Fiscal Cliff deal on the real estate industry, check out Realtor.org's break down of the bill's components at: http://www.realtor.org/articles/real-estate-provisions-in-fiscal-cliff-bill. Or call the Claus Team directly at 210.566.6355 and let us chat with you about what you can expect from the real estate market in 2013!