Changes to the tax code for 2013 earnings largely left real estate untouched. The mortgage interest tax deduction (MID) is still safe and sound, just as sacred as ever. The Mortgage Forgiveness Debt Relief Act (Debt Relief Act) was extended for another year, ensuring short sales will continue at pace.
Although income tax breaks were extended for the middle class, the payroll tax break was allowed to expire. The payroll tax increased by two percentage points for middle income earners in 2013. This increase has noticeably diminished the take-home pay of approximately 77% of American households.
Many first tuesday readers believe that this will negatively affect home sales volume in 2013. We disagree.
While consumer spending may suffer, buyer purchasing power will remain strong through 2013. Buyer purchasing power is determined by interest rates and a buyer’s gross income, which obviously has not been affected by the increased payroll tax. This is tracked monthly by first tuesday’s Buyer Purchasing Power Index (BPI).
Results of vote and more information at source: http://firsttuesdayjournal.com/the-votes-are-in-2013-tax-code-is-no-good-for-real-estate-sales/