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Daily Real Estate News | May 22, 2007 |
Tax Savings Helps Condos Sell In Slow Markets
Some cities, mostly in places where the market has slowed significantly in the last year, are offering incentives in the form of tax abatements to help developers unload slow-selling condominiums.
The neighborhoods tend to be pre-gentrification, but the savings can be significant. For instance, the buyer of a two-bedroom condo in a 180-unit development in a former school in Grand Rapids, Mich., will save about $5,300 a year in taxes until 2018. The savings is transferable to a buyer.
Kansas City, Des Moines, Brooklyn, Harrisburg, Columbus, Tacoma, Wash. and Richmond, Va. have dangled similar tax holidays in front of buyers.
Anyone who is buying a condo for investment should read the fine print. In many new projects, developers limit the number of investors to as little as 10 percent of total available units. And that's despite more lenient standards set by Fannie Mae, which buys many condo mortgages from lenders. Fannie Mae permits an investor-owned level as high as 30 percent.
Source: Forbes, Matthew Swibel (06/04/07)
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