The Real Deal New York

Posts Tagged ‘fiscal cliff’

  • Manhattan home owners who scrambled to unload high-end properties just before the nation went over the fiscal cliff a few months ago probably lost money because the madcap rush pushed prices down, the Wall Street journal reported.

    December set a record for luxury sales, more than 60 percent above the highs during the real estate boom, new data reviewed by the Journal shows. In Manhattan, 156 properties each priced at $4 million and up changed hands – many just days before the federal government increased the capital-gains tax rates.   [more]

  • The taxman cometh

    February 21, 2013 10:30AM

    From the February issue: Anyone who’s picked up a newspaper or logged onto the Internet in the last month knows that lawmakers cut a last-minute deal to avoid the so-called fiscal cliff, narrowly avoiding widespread tax increases and deep spending cuts. But now New York real estate investors and home buyers — along with their accountants — are watching closely to see how that deal will affect the residential and commercial markets here. The major impact for New York real estate, observers said, could come from increases in federal capital gains rates, as well as from a Medicare surcharge tied to President Barack Obama’s Affordable Care Act. Some speculate that the capital gains increases (which range from 5 percent to 8.8 percent on the margin) could cause a drop-off in the number of properties traded, as well as an increase in asking prices for residential and commercial real estate. [more]

  • From the February issue: Although it wasn’t a total win for homeowners and sellers, the patchwork legislation that emerged from the fiscal cliff fracas on Capitol Hill came pretty close. In fact, it even reached back and resuscitated two key tax benefits for housing that had expired more than a year ago. Now homeowners will be able to take deductions on their upcoming 2012 tax returns that they assumed were no longer available. [more]

  • 2410-2418 Broadway

    In the rush to beat the fiscal cliff, a 12-story Upper West Side apartment building at 2410-2418 Broadway at West 89th Street traded for $47 million just before the new year, the New York Post reported. The buyer was real estate investor Robert Gilardian and the seller was a partnership dubbed M.E. & A. Realty. The 46-unit building — 61 percent of which are rent-regulated — had been owned by the same partnership for 70 years, which included 14 members at the time of the sale. The building includes 5,000 square feet of retail space mostly on the Broadway side. … [more]

  • From the January issue: Although the European debt crisis seems to be further from investors’ minds today than it was a year ago, fresh hurdles like the fiscal cliff standoff in Washington, prospective tax changes and a New York City mayoral election loom. And those are not the only questions that industry pros are pondering as 2013 gets underway. Also on their minds: Will the tech sector continue to prop up commercial leasing? What kinds of housing stock will move — and what will languish on the market? Where will the next wave of retail condo sales take place? And which overall sectors of the market will investors gravitate towards? This month, The Real Deal talked to New York City real estate insiders from several different sectors of the market to get their industry predictions for 2013. [more]

  • The U.S. housing market stands to benefit from two tax provisions that were left alone in the hasty budget compromise that Congress reached yesterday, CNBC reported. In seeking to avert the fiscal cliff, federal lawmakers opted not to touch the mortgage-interest deduction and extended tax relief on mortgage debt forgiveness for a year. [more]

  • U.S. construction spending in November fell 0.3 percent below the revised October figure of $868.2 billion, according to the U.S. Census Bureau and the U.S. Department of Commerce. Spending in November totaled $866.0 billion, a 7.7 percent year-over-year gain. As The Real Deal reported last month, the October figures showed a second consecutive month of gains, following a large drop in July and another fall in August. [more]

  • Rising anxiety over the so-called fiscal cliff caused construction employment in New York to fall 5.2 percent year-over-year, an analysis by the Associated General Contractors of America of Labor Department shows. The prospect of federal tax increases, combined with spending cuts, has made contractors anxious, and resulted in 16,100 fewer construction jobs in New York, year-over-year — bringing the number of construction jobs statewide down to 292,200. … [more]

  • From left: Robert Dvorin, Meredyth Smith and Dolly Lenz

    As the year winds down, there’s now a rush among the well-heeled crowd to close deals on residential properties in order to beat the tax increases that could take effect on New Year’s Day, the Wall Street Journal reported. Though year-end rushes aren’t uncommon, the Journal said, adding fuel to the fire this year are potential tax increases on real estate, for example, that are in play as politicians work to steer clear of the fiscal cliff. [more]

  • Mary Ann Rothman and Eva Talel

    Attorneys and property managers have been inundated with requests to transfer apartments to trusts before the new year, when some co-op owners will face a series of tax changes triggered by the fiscal cliff, the New York Observer reported.

    If Congress fails to reach an alternative budget deal, beginning on Jan. 1, homeowners will no longer be able to take advantage of the $5.1 million gift tax exemption. They will also face an inheritance tax of 55 percent, a jump from its current level of 35 percent. [more]

  • Ara Hovnanian and Doug Yearley

    Major U.S. home builders are urging President Barack Obama and House Speaker John Boehner to avoid the fiscal cliff even if it means adjusting tax rates, the Wall Street Journal reported. In a letter addressed to the two elected officials, CEOs of such companies as Toll Brothers and Hovnanian Enterprises voiced concerns that allowing the steep package of budget cuts and tax increases to take effect could shove the country back into a recession. [more]

  • From the December issue:  Manhattan’s luxury residential real estate market will remain in limbo for the remainder of the year as speculation continues over how negotiations on the nation’s fiscal policy play out in Washington, brokers say. While some buyers and sellers are rushing to close on deals already in motion in order to avoid an inevitable rise in capital gains taxes, brokers said, consumers still considering a sale or purchase are holding off. They are waiting until Congress agrees on a plan to deal with a confluence of fiscal issues, including the expiration of the Bush-era tax cuts, spending cuts and the national deficit. [more]

  • What’s ahead in 2013

    December 14, 2012 10:00AM

    From the December issue: If 2012 was the year of recovery for New York City’s real estate industry, 2013 might be the year of uncertainty. New York City real estate faces a number of unknowns heading into 2013, from post-Sandy devastation to the upcoming “fiscal cliff.” The year will also see the city’s mayoral race heat up — another subject that brings nail-biting anxiety to real estate professionals. In this end-of-the-year issue, The Real Deal looked at these and other key issues that will impact the real estate industry in 2013. [more]

  • Patrick Boris, a banquet chef in Las Vegas, is inching closer to his own “fiscal cliff,” 2,100 miles away from the political brinksmanship under way on Capitol Hill. If Congress and the White House allow the country to go over the cliff later this month, Boris figures he could owe federal income taxes on more than $100,000 in forgiven mortgage debt following the short sale of his two-bedroom townhome next year — a personal financial “disaster,” in his words.

    In Sacramento, Calif., Elizabeth Weintraub, a real estate broker who specializes in short sales, says “many” of her clients have potentially taxable exposures on $200,000 or more in negative equity balances on their short sales next year if Congress fails to act.  [more]

  • President Obama

    As the “fiscal cliff” debate heats up, President Barack Obama tweeted that mortgage-interest deductions could be on the chopping block if Republicans don’t agree to raise taxes on the wealthiest Americans, Housing Wire reported.

    While rumors have been circulating since the election that lawmakers may scrap the once-sacred tax break, the Tweet marked the first time the President has officially stated the policy shift is up for discussion in Washington. [more]

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  • What would happen to home values in the event that popular real estate deductions for mortgage interest and local property taxes were cut significantly? It’s an issue you’re likely to hear more about as Congress and the Obama administration wade deeper into “fiscal cliff” and comprehensive tax reform negotiations heading into 2013.

    Some of the forecasts are scary: Any significant reductions in these long-established tax benefits would inevitably trigger declines in home values. Under some circumstances, they could be well into the double digits — 15 percent, according to Lawrence Yun, chief economist of the National Association of Realtors. “That’s how much we can expect values to fall as buyers discount the value of the deduction in their purchase offers,” Yun said. [more]

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  • Ty Warner nixes $900M Four Seasons offer

    November 27, 2012 10:30AM

    Ty Warner and Four Seasons Hotel New York

    Following an unsolicited $900 million offer for the Four Seasons Hotel New York from an unidentified Asian investor, billionaire Beanie Baby broker Ty Warner has rejected the deal, Bloomberg News reported. Warner purchased the 368-room hotel, located at 57 East 57th Street, for $275 million in 1999. If Warner had accepted the offer  — equivalent to about $2.4 million per room — it would have been one of the priciest hotel sales ever in Manhattan. [more]

  • Jerry Howard, CEO of the NAHB

    With the so-called fiscal cliff on the horizon, lawmakers are considering a number of revisions to the mortgage interest tax deduction, the largest housing-related subsidy in the U.S. tax code, CNBC reported.

    Among the propositions on the table: capping the deduction at $500,000, capping it at $250,000, limiting the use of the deduction for taxpayers earning over $250,000, or eliminating it entirely. [more]

  • David Kessler of CohnReznick

    A slew of federal policies are set to take effect in January that will radically cut federal spending and end some of the Bush-era tax cuts. But the so-called fiscal cliff will have radically different effects on commercial real estate values across the country, CoStar reported.

    In New York City, “the real estate sector is about to take a big kick in the gut,” David A. Kessler, a commercial real estate specialist at public accounting firm CohnReznick, told CoStar. Kessler predicted that every commercial real estate sector will seem some decline, but the hardest hit will be office and industrial, hurt by declining government and consumer spending. [more]


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