Across the United States, the housing market is suffering from the economic climate; In some areas, economic decline combined with overbuilding in previous years has left many condominium units vacant and unwanted for long periods of time.
In the years before the recession, there was a boom in condominium construction in many American cities as real estate values continued to rise with no apparent end in sight. This recent construction boom, in many areas, has helped cause an even greater glut in the condo market when combined with the economic downturn and subsequent foreclosure epidemic.
One of the programs that has been supporting condo sales is urban tax breaks that allow homeowners in certain areas to pay reduced or no property taxes to give buyers an incentive to live in areas previously considered undesirable. Many of these tax exemptions were established for finite periods of time, ranging from five to fifteen or twenty-five years; and some of these tax cuts are now coming to an end at a particularly bad time.
Because so many homeowners are already having trouble paying their mortgages, the end of these tax breaks has the potential to increase this problem exponentially. With all the foreclosed homes on the market today, as well as homes that have already been on the market for an extended period of time, there is a very real possibility that America’s city condo markets will soon be in worse shape. conditions. form.
The increased number of condominiums that are likely to become vacant once these tax breaks have expired is likely to cause additional stress for condo owners who remain in their homes. In condominiums, owners pay association dues to collectively cover building maintenance costs and pay employees such as doormen or security. The fewer owners there are in a condominium complex, the fewer parts this monthly payment can be divided into and the greater part of the change each of the homeowners will have to fork out. These higher monthly association fees will put more pressure on owners who are already overburdened and struggling to keep their condos.
There does not appear to be any plans in the works for homeowners who will be affected by the expiration of this tax cut at this time; But it would probably be in city governments’ best interest to start devising ways to help ease the financial pain homeowners are likely to feel from this problem.
