Sounds pretty grim for investors in St. Louis: their governor is making vague references to cutting nearly 86 million dollars in real estate-related tax credits. The opposition is heating up, blogging about how these cuts could destroy development in the city’s historic and low-income districts. The governor has responded by pointing out that these tax credits are not producing the revenue that they were designed to create.
At first, cutting these credits sounds to me like a negative as far as real estate investors are concerned. After all, about 1.8 million buyers made use of the federal home buyer’s tax credit expiring in April. Don’t we want to keep that type of incentive for our investing and sales use? After all, anything right now that makes that house easier to move sounds pretty good in my book. However, when I did a little more looking, turns out a lot of that 86 million goes to historic renovations, movie shoots and agricultural properties supporting qualified livestock.
While historic properties, movie-ready properties and agricultural benefits are all good things and probably good for the city of St. Louis, it does seem possible that these types of credits are maybe diverting or “fuzzing” the focus when it comes to creating real revenue. While I imagine there are a lot of people who are making a good living by working these credits to their advantage, I wonder if it might not be more effective to remove the credits and find a different place to make that money work – maybe in the form of tax cuts for people who are creating revenue in the area.
Now, I’m not from St. Louis, so I’m not saying that I’m an expert on these matters. And if you are, I’d love to hear a local perspective. Because with such highly specific requirements for these credits, I wonder just how many people will actually be affected. It seems to me like a lot of these highly specialized real estate programs could be far more beneficial if they extended their sphere to include more of the people who are pulling the market out of the tank rather than excluding the majority of investors from the program.
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If we want to save what is left of our country, it is time to stop all of this stupid wasteful spending. Letting the people whom make the money spend it will be the best choice in the long run.
Every tax credit, entitlement, tax dollar spent is a theft from someones hard work earning of that money. Not one government idea has ever earned one dime of real money! Or boosted the GDP!!
The reason so many states and the feds and counties and cities are in a money crunch is because they all feel they can just squeeze more money out of people with impunity. They give it away to all of these “vital” programs which earn little to nothing and have cute names which people like but when you dig a little bit you quickly find most of the money goes for things no one was ever told about, just like the last 180 billion dollar “Jobs” bill congress passed that has almost no money in it for the proposed purpose of the bill. One more lie being crammed down our throats!
So good for this governor! Hope he has the balls to really follow through with stopping some of the criminal spending by government!
As an active commercial RE investor we have utilized several government programs to make a project pencil out. Most would NOT have been completed without them…
As a libertarian I would rather see a FLAT tax and less government involvement…
As an individual it pains me to see unmeet need…
needs I see almost everywhere I look…
As a father I want to walk lightly and leave it a better place…
As someone who is from and presently lives in St. Louis, as well as an avid reader of your daily real estate newsletter, I have mixed feelings for the Mo Real Estate Tax Credits. Yes, they go to a very small number of people, and yes, these people rely on them and make a nice living — partly due to them. However, their purpose was to go towards rehabbing historic properties thoughout the State and I’m sure, in this market, their full benefit is not being realized. Also, as a full time real estate investor who focuses on facilitating short sales as well as in wholesaling property, I am, for the most part, unable to take advantage of these tax benefits. They did serve a good purpose in the “olden days”, but may have taken their toll. Even though I usually do not support this Governor, I’m going to have to agree with him on closing this loophole and have to believe that the monies could better be spent elsewhere.
-Jeff Mishkin