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The impact of the Fiscal Cliff on Real Estate Investing

By
Managing Real Estate Broker with HomeUnion CalBRE Lic# 01526904

So now that the elections are over and President Obama has won a second term, the focus shifts to the fiscal cliff. What is this cliff exactly?  And how steep is the fall?  Well, pretty steep, if we fall.  In essence, three things are set to happen:

The first is the expiration of tax cuts.  Payroll tax cuts from last year would expire as would the Bush-era tax cuts, the end of certain tax cuts for businesses and the emergency unemployment benefits.  The second is an actual increase in taxes from the Health Care Law.  The third is automatic spending cuts agreed upon from the budget deal in 2011.

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Comments (2)

Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

You forgot another one -- the forgiveness of taxes on the forgiven balances on shortsales.  That will negatively impact the short sale marketplace.

You mention the job loss situation -- that is already beginning (as larger employers need to give employees 60 days notice before layoffs.)  I saw a fairly long list of companies (branches, and it was only a sample) that are closing their doors, as well as another list about the same length that will be cutting employee hours back to about 28 hours, so they don't have to cover them under the healthcare programs.  Looks like there will be a lot more people working two jobs to get their normal income.

Nov 16, 2012 07:36 AM
HomeUnion
HomeUnion - Irvine, CA
Managed Cashflow Investment Property Marketplace

Steven, yes, shortsales is another one.  All these fiscal cliff issues can be solved if all the camps put their heads together keeping the strategic and long term interest of the nation in mind and quickly pass resolutions.  The key is to put the parties agendas behind and work together.

Nov 17, 2012 12:10 AM