Jun 03 2008
Foreclosure Tax Credit and the Pittsburgh Housing Market
The Foreclosure Prevention Act of 2008 (H.R. 3221, S.2636) was passed April 10, 2008. The bill provides for a $7,000 tax credit for buyers who purchase a foreclosed property. The credit is divided equally during the first two years the buyer owns the property and it must be the buyer’s principal place of residence during that time.
So, if you’re purchasing a foreclosure as an investment property, you’ll have to wait two years before flipping it or renting it out.
There is some concern that making foreclosures more attractive to buyers could hurt private sellers by adding more competition to the market and lowering home prices.
This could have an impact on the Pittsburgh housing market. The area in general has a lower foreclosure rate than many other metropolitan statistical areas. However, some local areas have higher rates than others. For example, the North Hills has a relatively low foreclosure rate while the eastern suburbs has a higher rate.
As with all economic predictions, how this would actually play out in this area remains to be seen.
The bill has passed both the House and Senate in slightly different versions. Once those differences are worked out, the bill will proceed to the White House. President Bush’s advisors are recommending he veto the bill, based on two provisions - one which would allocate $4 billion to state and local governments for redevelopment of abandoned and foreclosed homes, and another provision which would modify bankruptcy codes.
You can click here to read the details of the bill.
Leave a Reply
You must be logged in to post a comment.
