Already feeling the effects of the fiscal cliff
Back in 1986, the “Tax Simplification Act” drastically changed the way real estate transactions, among many other things, were taxed. That year’s December 31 was one of the busiest days in the history of the Middlesex North Registry of Deeds (so I am told since I was not yet there back then). It also fed the belief that every December 31 is a very busy day in the deed recording business. Experience has proven that not necessarily to be the case, especially since the collapse of the housing market five years ago. But it does seem to be true this year, not because of a new tax law but because of no tax law.
It seems that the belief has developed, perhaps with good reason, that any contemplated real estate transactions should be completed by close of business Monday (December 31, 2012) to take advantage of the certainty of the existing tax code. Depending on how things go (or don’t go) in Washington, the tax bill for some transactions could increase substantially after the first of the year. That caused things to get very busy today at the registry of deeds. There was a sense of urgency among the customers that hasn’t been there since the market collapsed in 2008. Unfortunately, I don’t see any momentum from this spurt of activity carrying over into the new year. If anything, a delay in resolving things in Washington might serve to slow or even freeze the real estate market since it’s hard to make deals when the consequences are unknown.