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TAX CREDIT FOR FIRST-TIME BUYERS SHOULD BOOST FLORIDA HOUSING MARKETS

TAX CREDIT FOR FIRST-TIME BUYERS SHOULD BOOST FLORIDA HOUSING MARKETS
 CLEARWATER, Fla., Jan. 29 /PRNewswire/ -- The chief executive officer of Florida's largest independent real estate brokerage company today stated that President Bush's proposed $5,000 tax credit for first-time home buyers should boost the cycle of home buying and selling that exists in Florida's residential real estate markets.
 "There should be a trickle-up effect with this proposal," said Richard W. Cope, chairman and chief executive officer of The Prudential Florida Realty. "First-time home buyers will buy homes from sellers looking to move up to bigger, more expensive homes. That creates a cycle that will boost existing home sales activity throughout Florida."
 President Bush proposed a tax credit of 10 percent of the purchase price of a home, to $5,000, for first-time buyers who purchase between Feb. 1, 1992 and Jan. 1, 1993.
 "Certainly this proposal creates an incentive to increase home ownership among Americans," Cope said. "If enacted, we should see a short-term boost in Florida home sales."
 The president's proposals affecting investment property is a first step toward curbing the slide in real property values that has occurred since the 1986 tax package, Cope said.
 "It's a step in the right direction, but we shouldn't expect a rush of investors to be attracted to commercial real estate based on these proposed changes alone," Cope said.
 A capital gains tax rate of 15.4 percent for investments held at least three years should be most beneficial to sellers of vacant land, which has generally continued to appreciate. However, because of declining commercial real estate values since 1987, there has been little capital gains accumulation for owners of developed properties since that time.
 The proposed Investment Tax Allowance does not affect real estate investments but should entice business owners to upgrade or purchase equipment, Cope said.
 However, the proposed passive loss rule changes may encourage the owner/occupied segment of the commercial real estate market to purchase a building that requires renovation.
 "This really is the best time for professionals and small businesses to consider purchasing a building for their business needs," Cope said. "Interest rates are the best we've seen in 20 years, there's inventory available at reasonable prices, and the tax considerations may be changing to favor more owner/occupied investment."
 Cope's reaction to these proposals is based on the president's address, and he expects that there will be changes as the budget package moves through the Congressional process.
 The Prudential Florida Realty is Florida's largest independent real estate brokerage, with 60 offices throughout the state. More than 2,600 licensed sales associates generated $2.90 billion in sales in 1991. The company has more than 300 employees.
 -0- 1/29/92
 /CONTACT: Linda Burger of The Prudential Florida Realty, 813-442-4111; or Robert Kneeley of Robert Kneeley & Co., 305-493-8220, for The Prudential Florida Realty/ CO: The Prudential Florida Realty ST: Florida IN: SU: ECO


AW-SS -- FL006 -- 4881 01/29/92 16:03 EST
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Publication:PR Newswire
Date:Jan 29, 1992
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