Special offer

50% Tax Depreciation

By
Real Estate Agent with Remax Alliance - Huntsville

Have you heard about GO ZONE!!  GO ZONE is a federal program that was inacted after hurricane Katrina and Rita in 2005.  What this means is that if an investor meets certain qualifications and the purchased property meets certain qualifications the purchaser can receive a 50% tax depreciation the first year of ownership.  This is huge but it will end soon.  For Baldwin County this incentive will end at the end of 2008

Basically if you are a Real Estate professional of some sort....such as rental agent, Realtor, builder, etc. you may qualify for this tax break.  The property must be new and must be used as a rental property.  It can not have been put into service before you purchased it.  For example...if you and the property both qualify and you purchase a property for $500,000.00 by the end of the year of 2008 in Baldwin County Alabama (some other coastal counties also qualify) you can qualify for a $250,000.00 tax break.  You can use this all in the same tax year or you can divide it up over the past 3 years or use toward future tax owed. 

This is a great incentive to help investors purchase property along the coast.  For more information and more accurate and precise information consult your accountant.

Posted by

Karen Harrison, Realtor

Comments(2)

Audrey June-Forshey
RE/MAX Realty Services - Darnestown, MD
GRI, Gaithersburg, MD

Karen, I called one of my friends in Montgomery to ask her if any of her investor friends knew about this.  This is pretty enticing?  Maybe I will go online and see what is on the market.  What kind of rents to the condos get?  Do they stay rented year round.  Is it just for condos or for all properties?

Oct 14, 2008 03:35 PM
Anonymous
Karen Harrison

It does apply to all properties as long as it is a new property.  However,  the most return for your money is a condo market.  You could purchase a new home and put a renter there also but the problem with that is that it would be a year round rent so you would never be able to enjoy it yourself, also the year round rental market is just as depressed as the sales market.  There are a lot of properties to purchase and there are a lot of properties to rent.  There are foreclosures and people that may have thought they could have afforded to purchase by now and can't so....the rental market is also flooded with renters and they go where the best price is. 

If you were to find a property on the beach for around 400,000. It would probably bring in around 28,000. to 38,000.00 gross.  The best and highest rents are being seen by people who rent their properties themselves through a web site called VRBO.com.  These properties are not rent depressed because they are vacation rentals.  Go to my web site at www.karensgulfproperties.com I don't currently have anything listed go zone in that price range the only thing I have listed is a 1,199,000. property that would qualify and a 775,000. that would possibly qualify.  There are  a few still available in that price range.

Thanks for your comment

Oct 15, 2008 12:23 AM
#2