If Congress drives the economy off the "fiscal cliff," wave goodbye to short sales that have helped the housing market get back on its feet.
At risk is the expiration of a provision that erases taxes on selling a home for less than what's owed to the bank.
The change would create a major new headache for the one in four homeowners who owe more than their house is worth. Now, those "underwater" sellers would have to come up with a big check for Uncle Sam to pay the tax on the difference.
That “would be a blow to the housing recovery,” said Paul Diggle, a housing economist at Capital Economics. “The increased use of short sales, rather than foreclosures, has become an important support to the recovery.”
2 comments:
Get used to it...We're all doomed.
I'm a long time home builder and I guess they forgot to tell me that the housing market is back on it's feet. The housing market is terrible.
Ask your local lumber yard, floor covering supplier, appliance store and on and on. You think it's just builders and carpenters out of work, not hardly. The poor housing market has long reaching effects.
My business has been hanging over it's own fiscal cliff for a couple years now. I saved money, owned two houses and planned for retirement. If I knew four years ago what I know now about the present administration and what they planned to do to the economy I would have bailed. Instead, I tried to stay afloat, which took most of my money in insurance payments, license fees and taxes. God save us all.
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