From the IB Times:
As the U.S. housing industry begins to sputter with signs of life, wealthy homeowners face a different kind of problem: selling their posh condos, villas, and waterfront properties before the onset of the dreaded fiscal cliff at the end of this year.
Owners of luxury homes are panicking at the prospect of shelling out millions of dollars more in capital-gains taxes beginning next Jan. 1, after the Bush tax cuts expire. As a result, they are pressuring exasperated brokers to find them good deals in the next five months. Their soaring desperation could eventually cripple housing prices overall, according to real-estate experts.
“This has become a key issue for sellers,” Stephen Games, chairman of Pacific Sotheby’s International Realty, a San Diego-based real-estate agency, told CNBC in a recent interview. “Sellers want to get a deal done before the election. They want to avoid the uncertainty.”
If the Bush tax cuts are allowed to expire, the current capital-gains tax of 15 percent would increase to 20 percent. Against such a backdrop, anyone selling a second home owned for more than 12 months would have to pay a capital-gains tax on the profit made on the sale — in other words, the difference between the original purchase price and the selling price — according to Alan Kufeld, an adviser to high-net-worth families and a consultant at accounting firm Rothstein Kass.