Good News! This week, the US Commerce Department announced new-home sales grew 5.7 percent in September to the highest level in 2 ½ years. The National Association of Home Builders also announced that builder confidence is at its highest level since June 2008. Let’s hope this community expansion and increased consumer confidence does not slip back into a recession because Congress allows housing tax credits and deductions to expire January 2.
Will Congress renew the mortgage-debt-forgiveness tax provisions for homeowners whose lenders write off portions of their debt as part of the loan modifications, foreclosures, short sales, or deed-in-lieu-of-foreclosure? Without an extension, borrowers who receive reductions in principal next year would be hit with federal income taxes at their regular marginal rates on the amounts forgiven. Will there continue to be deductions for mortgage insurance premiums, tax benefits for homeowners who install energy-savings improvements, tax credits for builders of energy-efficient houses, and the extension of current relief for middle-income taxpayers from the alternative minimum tax (AMT)? The lame duck session will impact millions of homeowners and your communities and we’ll continue to track these issues and provide updates.
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