HOUSINGNEWS REPORT
LEAD ARTICLE
Either you were a resident owner or a nonresident owner; you could not have one owner who lived on the property as a resident and a second owner who took depreciation. This arrangement discouraged not only investment but also family members from helping one another. However, in 1981 Congress amended the tax laws so that a single property could have two owners with two different occupancy statuses: a resident owner who occupies the property and an investor owner who does not. While designed generally to help family members own together, the provisions outlined in the Black Lung Benefits Revenue Act also allowed investors to own with unrelated parties.
reflect their involvement. The resident owner — the owner-occupant — can deduct a portion of the mortgage interest and property tax costs while a non-resident — the owner investor — can deduct such expenses as mortgage interest, property taxes, repairs, and depreciation. Why Now? Millions of potential real estate buyers today linger on the sidelines, unable and often unwilling to purchase a home of their own. Despite remarkably low mortgage rates, ownership levels are falling and potential first-time buyers are losing interest. Superficially it’s hard to see a problem; the real estate market is doing very well. The typical existing home sold for $263,800 in June, up 6.5 percent
from a year earlier and was the “64th straight month of year-over-year gains,” according to the National Association of Realtors (NAR). By any standard such sale and pricing numbers are impressive and surely good news for homeowners. However, a closer look at the marketplace shows that huge numbers of potential sales are being lost. In a new study for NAR, the Rosen Consulting Group “estimates that there are roughly 9 million more households that could afford to purchase the local median-priced home in 2016 than in 2007 based on household income.” Brian Bailey, the Co-Founder and COO with California-based OWN home finance, p.b.c., estimates that the shared
With shared equity each owner treats the property for tax purposes to
RISE OF CO-BUYERS SHARED BUYER PCT
16.3%
14.9%
13.7%
Q1 2015
Q1 2016
Q1 2017
2
JULY 2017 | ATTOM DATA SOLUTIONS
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