The “Fiscal Cli ff” The Favorable Impact on the

Real Estate Industry
Real Estate Market Wins Big as Three Major Provisions Survive the Fall

The real estate industry came out a winner this week as the “fiscal cliff” legisla on le the housing market rela vely unscathed for now. Congress extended breaks on three major points which will have a posi ve impact on the industry as we head into the spring market.


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Tax Deduc bility of Mortgage Interest 
Leaving the tax deduction for mortgage interest untouched was a huge win for many homeowners who will continue to be able to deduct their mortgage interest on their federal income tax returns.


Mortgage Forgiveness Debt Relief 
If an agreement had not been met this would treat principal balances, written off through short sales, deed‐ in‐lieu, or foreclosure, as ordinary income to homeowners who received the tax reductions. This would have greatly impacted the short sale market, encouraging more homeowners to choose foreclosure or bankruptcy.


Deduc on of Mortgage Insurance Premiums 
Borrowers who pay private mortgage insurance premiums, and have an adjusted gross income of less than $110,000 will be able to write off those premiums, along with mortgage interest on their federal tax returns.

We look for the above to: Strengthen rising home prices   


Lower the number of foreclosures on the market Help troubled homeowners stay in their homes 

This is great news for real estate as we project less supply on the market, con nuing improvement of home prices and a faster and broader recovery for the industry.

*Please consult with your tax advisor for all tax related ma ers.

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