International real estate buyers have been encouraged to examine the case for buying property in the Go Zone by the head of overseas property portal Homesgofast.com.
Following Hurricanes Katrina and Rita in 2005, the US Congress passed the Gulf Opportunity Zone Act, or GO Zone Act. The Act provides special tax incentives to spur rebuilding in the hurricane-damaged areas of Mississippi, Louisiana and Alabama along the Gulf of Mexico coastline. The GO Zone Act offers several tax benefits to properties built and placed into service in the GO Zone region after the hurricanes. The incentives are being offered by the government to help bring back life once again to the affected areas and rebuild the economies of these states.
Though hurricanes Katrina and Rita affected most of the states of Alabama, Louisiana, Florida, and Mississippi, as well as some of Texas, not all parishes and counties in these states are covered by the provisions of the GO Zone Act. In Louisiana, for example, only 37 parish areas are eligible to claim the benefits provided by the act. Some of these parishes are Calcasieu, Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist and Washington. Key provisions of the act are:
• 50% bonus depreciation is available to businesses of all sizes for investments in equipment, non-residential real property or residential rental property.
• NOL carryback for qualifying losses extended from 2 years to 5 years.
• Tax-exempt bonds worth about $4.9 billion are available in Mississippi. These tax-exempt, private-activity bonds can be used to finance commercial projects. Participating businesses could save up to 200 basis points in interest costs annually.
• Increased deduction for qualifying tangible personal property for small businesses.
• Employee Retention and work opportunity tax credits available to qualifying employers.
• Portion of demolition and cleanup expenses may be expensed instead of capitalized.
• New markets tax credits increased for qualifying investments in low-income communities.
• Increased qualified rehabilitation credits for historic structures.
CEO Nicholas Marr from Overseas property portal Homesgofast.com writes in a recent overseas investment property blog ‘This is a true Emerging Market that combined with tax incentives, beneficial exchange rates and very low property prices may offer the international investor superb opportunities”
The need for new housing in this area is substantial, and developers have been working to bring projects online as quickly as possible. There is now quite a bit of housing in the GO Zone that is available for interested buyers with major tax and price benefits. Additionally, there are opportunities for those who are interested in buy-to-let properties. If you want to manage the property yourself or sit back and let a third party take care of everything, there are many buildings and homes that can be rented.
