Posted on | December 5, 2012 | 18 Comments
Hamptons homeowners have launched a selling spree, offering fire sale prices to get rid of their properties before higher capital gains tax rates are expected to kick in Jan. 1.
Top brokers expect more than 30 closings on big-ticket properties priced from $1 million to $25 million.
“There is a frenzy here right now,” said Enzo Morabito, a long-time Hamptons-based broker with Douglas Elliman. “People know they save money if they sell now. I have very willing sellers and hot buyers who want to take advantage of the low interest rates that might go away next year as well.”Morabito reported eight closings on transactions involving his team before New Year’s Day, including a $14.9 million estate in Water Mill and a $6.9 million mega-mansion in Bridgehampton.
“They know they lose money if they wait till next year,” he said.
Capital gains taxes are expected to rise during negotiations over the so-called “fiscal cliff” as lawmakers close a yawning budget gap. The rate may rise as high as 39% on short-term investments, but is expected to jump about 5% on long-term gains.
Some people are so stupid (we call them “Democrats”) as to think that their soak-the-rich tax plans are aiming at fixed targets. However, tax policy provides incentives for action, and the desire of the rich to protect their assets and income against exorbitant taxation will inevitably result in action that falsifies any “rosy scenario” projection of how much revenue could be gained by such measures. There are always unintended consequences to liberal policies that counteract (and often completely negate) whatever positive results are achieved.
Democrats like to talk about the need for government “investments” in infrastructure. Too often, this consists of paving a road with good intentions, without regard for the proverbial destination.