Incentives for new condo buyers are increasing in many real estate markets. Everything from price cuts, free merchandise such as cars and appliances to a year’s free tuition are offered by anxious developers looking to get condo residences under contract and sold. In some markets, tax abatements are offered to new buyers. And then, of course, there is the $8000 tax credit incentive from the Federal government.
In Baltimore, tax abatements seem to be popular, especially in luxury developments. For new construction, the tax is figured on the basis of the price of the home. A Baltimore condo buyer who is downsizing from an existing home may have had their property taxes capped over a period of years, but when they buy new construction, the assessment of the tax starts all over – and is often much higher. With a tax abatement, new homeowners are able to phase in paying 100% of their property tax over several years.
The credit is up for renewal, and it is controversial. For many Baltimore condo buyers, it is a definite sweetener of the deal, and makes living in new construction preferable to other alternatives. There are some arguments to limit the credit to specific areas, or questioning whether the incentive to buy new construction (and thereby build new construction) is an effective use of city dollars.
But for the Baltimore condo buyer, it is a definite plus.