Gratia Group Featured Lot of The Week: Great Location in Port Charlotte, Florida

Avery Road PC FL
This week Gratia Group is excited to announce a newly listed Featured Lot of the Week, a great deal in Port Charlotte, Fl.  Located at 15505 Avery Road, Port Charlotte, FL 33981 this undeveloped Florida lot for sale is a perfect find for an investor wanting to build their real estate portfolio with great investment land parcels.  Listed at only $10,900, this lot is sure to sell fast.

The zone on the Gulf of Mexico from Venice to Port Charlotte is world famous for its fishing, beaches and beautiful climate.  Now it is also one of the best places in the US to find profitable land and waterfront property investment opportunities.  The real estate market meltdown is over and land prices have started to rise quickly after reaching bargain levels across the board, usually down 60% to 90% since August 2005.  Port Charlotte land prices are moving up and home inventories very low, at seller’s market levels.

To learn more about the Gratia Group Featured Lot of the Week contact an expert member of the Gratia Group sales team at (239) 333-2221.

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2015 Tax Season- What You Need to Know About 1031Exchange

1031_2015 Tax Reform

The 2015 tax season brings an end to the 1031 or like-kind exchange of property.  It means the end of dramatic tax benefits of a like-kind exchange of property.  Taxpayers using this technique in 2007 (the last year for which figures were available) deferred the tax on a total of $82.6 billion in gain, due mainly to swaps involving real estate and vehicles.

Let’s start with this basic premise:  If a client owns investment property like real estate that has appreciated substantially in value, they might owe a large capital gain when they finally sell the property.  In addition to paying the maximum 20% tax rate on long-term gains if they’re in the top ordinary income tax bracket (15% for most others), they may also be liable for the 3.8% surtax on net investment income.  Yet there is no current tax liability if they exchange the property for “like-kind” property in time.  The tax is deferred until they sell the replacement property, if ever.

Surprisingly, the IRS was quite lenient when it came to treating investment property as being like-kind under this tax law provision.  For example, you could have swapped an apartment building for a warehouse, or vice versa, and still qualify.  But both the property being relinquished and the property you were acquiring had to be investment or business property.  In other words, a personal residence couldn’t be part of a like-kind exchange on either end.

Typically, real estate swaps were difficult to consummate without involving multiple parties.  Both the IRS and the courts had approved such arrangements where the timing requirements were met.  In fact, a real estate investor could use a qualified intermediary to “park” the property until a qualified like-exchange could be finalized.

Consider the tax impact for a top-bracket investor who bought an apartment building for $500,000 years ago that is now worth $1.5 million.  If the investor sells the property for $1.5 million, the $1 million gain will effectively be taxed at a 23.8% rate (20% + 3.8%), resulting in a tax bill of $238,000, not even counting any state taxes.  However, if a timely swap of like-kind properties was arranged, the federal income tax bill is zero!

Previously, we alluded to meeting certain timing requirements.  To qualify for tax deferral on a like-kind exchange, you must:

  • Identify or actually receive the replacement property within 45 days of transferring legal ownership of the relinquished property
  • Receive title to the replacement property within the earlier of 180 days or your tax return due date (plus any extensions)

Note that the 180-day period begins to run on the date legal ownership of the relinquished property is transferred.  When the period straddles two tax years, the deadline might be shortened by the upcoming tax return due date.  For instance, if a client identifies replacement property on December 1, 2014, the exchange must be completed by April 15, 2015, absent any tax return extension.  To learn more, contact a member of the Gratia Group team at (239) 333-2221.

NW Cape Coral Paradise- The Gratia Group Featured Lot of the Week

4119 NW 19TH Ter Cape Coral 33993

Gratia Group, Florida land sales expert has released a new Featured Lot of the Week.  Listed for only $19,900, the Featured Lot of the Week would be a great addition to any investment portfolio or the perfect lot to use for a Florida dream home site.  Located at 4119 NW 19th Terrace in sunny Cape Coral, Fl (33993) this lot is located in a quiet neighborhood with many available lots for sale.

Investors have found great success in Cape Coral, particularly the northern section of the largest city in Southwest Florida.  A hot spot for boaters, golfers, fishing enthusiasts and those that love the natural beauty of South Florida, Cape Coral is home to a large population of foreign investors.  Don’t miss out on owning a piece of paradise!

Contact Gratia Group today to find out about these ROI producing Cape Coral lots or others in our land catalog by calling a member of the expert land team at (239) 333-2221.

What we can Predict from the Real Estate Market in 2015

2015 Real Estate Predictions

Expect the home-purchase market to strengthen along with the economy in 2015, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for December 2014.

The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015, only the second year in the past decade with growth at that pace or better. Governmental fiscal drag has turned into fiscal stimulus; lower energy costs support consumer spending and business investment, further easing of credit conditions for business and real estate lending support commerce and development and consumers are more upbeat and businesses are more confident, all of which portend faster economic growth in 2015.  And with that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations, housing activity and home and land sales.

Freddie Mac economists have made the following projections in housing for the new year:

Mortgage rates:  Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent.  But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.

Home prices:  By the time 2014 wraps up, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year.  Additionally, an uptrend in Owner Financed properties is expected. Appreciation is expected to drop further to an average 3 percent in 2015. “Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers,” according to Freddie economists.  “Historically speaking, that’s moving from ‘very high’ levels of affordability to ‘high’ levels of affordability.”

Housing starts:  Homebuilding is expected to ramp up in 2015, projected to rise by 20 percent from this year.  That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.

Single-family originations:  Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume.  Refinances are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.

Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.

To make a splash in the real estate industry in 2015 contact a member of the Gratia Group sales team at (239) 333-2221.