After a roller coaster election process and a prolonged week of vote-counting, Joe Biden was declared to be the 46th President of the United States. This will impact many different areas of government policy, including many crucial housing and real estate issues. Here are two top issues and what real estate experts think.
Joe Biden plans to give new, first-time home buyers a $15,000 tax credit available at the time of sale. According to an Inman article, “This would assist people in buying homes at a point in their lives when they often don’t make enough money to qualify for other kinds of tax benefits, and would allow first-time homebuyers to receive the tax credit when they make the purchase instead of having to wait to receive it the following year.”
From the Biden website, “Biden’s new First Down Payment Tax Credit will help families offset the costs of homebuying and help millions of families lay down roots for the first time.”
“Biden recognizes how challenging it can be for some people to become homeowners,” says realtor.com® Chief Economist Danielle Hale, predicting that his administration will “pursue policies that will make getting your foot in the door easier.”
The Biden-Harris campaign also introduced a 775 billion plan to bolster child care and care for the elderly that could include eliminating some tax loopholes, like 1031 or “like-kind” exchanges. According to Bloomberg, these “…allow investors to defer paying taxes on the sale of real estate if the capital gains are reinvested in another property.”
If this does become part of the proposed policy, real estate groups are planning to fight this. “Exchanges allow cash-strapped minority, women and veteran-owned businesses to grow their business by temporarily deferring tax on the reinvested proceeds,” Jeffrey DeBoer, head of the Real Estate Roundtable industry group, told the Real Deal in July. “Like-kind exchanges are particularly important during economic downturns when access to capital is less certain.”
While real estate groups believe the policy is admirable, they hope the new administration will fund it through other means.
Joe Biden has a lot of work ahead of him. Hopefully his administration will be able to accomplish their lofty goals in a way that will benefit both new and established homeowners and businesses.
If you would like to discuss how these new housing and real estate policies might affect your upcoming home purchase or sale, call Geva & Jane at 571.249.4382.