Extended window of opportunity for investors in the Go Zone
Following the devastation of hundreds of communities along the Gulf Coast of America back in 2005 when Hurricanes Katrina and Rita made landfall, the American people and the US government came to the financial aid and practical support of those affected.
Charitable donations from national and international sources poured into states such as Mississippi, Alabama and Louisiana, with the likes of President Bush and former President Clinton uniting to highlight the plight of displaced and grieving citizens in towns such as New Orleans and Biloxi – where collectively, the number of lives lost, businesses destroyed and homes ruined ran to hundreds of thousands.
To further support affected communities fiscally speaking, the US government provided emergency financial aid of over 6 billion dollars, and a further 51.8 billion dollars of aid has since been given specifically towards the rejuvenation of the entire Gulf Coast region. Louisiana is still in receipt of 3 billion dollars worth of aid that has yet to be allocated for example, and in addition to this direct financial support from the state, the US government passed extensive legislation to make ongoing private investment into the affected regions highly tax advantageous and attractive. They did so in an effort to create a sustainable environment for considerable long-term investment.
The legislation passed to specifically rejuvenate the hurricane affected communities was called ‘The Gulf Opportunity (GO) Zone Act of 2005’ and it was passed by Congress on the 16th of December 2005.
The GO Zone Act has proved so successful that in the face of economic uncertainty in the rest of America, employment, housing demand, affordability and even real estate prices in the hurricane affected states have surged ahead of all expectation. For example, Mississippi recorded a real estate price appreciation rate of 1.8% in 2007 when the rest of America was really feeling the property price pinch, and in March 2008 when US employers cut 80,000 jobs, state Labour Secretary Tim Barfield advised that Louisiana had 100,000 jobs available and intimated that professional migration would be required to fill the vacancies.
Therefore, the GO Zone legislation has already resulted in the rebuilding of thousands of homes, the regeneration of hundreds of communities, the creation of substantial employment and the restoration of hope for hundreds of thousands of Americans; and because the legislation has been so important for bringing national and international investment in to states such as Mississippi and Louisiana, the U.S. Senate has just approved an amendment to a bill which will allow for an extension of the GO Zone Act of 2005.
The act passed by the Senate and further approved by the House of Representatives is considered highly likely. Brand new qualifying projects to construct houses and restore life and hope in damaged communities in the GO Zone will allow individuals to invest until 31 December 2008 – with full benefits – and completion and “tenant” in” by 31 December 2010, thus giving investors, developers and business persons the remainder of 2008 to sign up to the GO Zone incentives, personally financially benefit and do more than their fair share to rebuild lives and dreams.
Speaking in direct response to the Senate’s decision to allow the GO Zone extension amendment to be added to the House Resolution 3221 bill, Danny Silver, who’s the managing director of Property Direct America and a leading US real estate authority stated that: “the proposition of an extension to the GO Zone Act is exciting and has far reaching and positive financial consequences for investors.
“Those who have only recently become aware of the fact that they can buy property in America in the GO Zone at below market prices and benefit from a waiting tenant demand, thus enjoying real estate ownership benefits as well as a solid rental income, will now have longer to find a qualifying project that appeals to them.
“They can take their time to find a housing project that, on top of the aforementioned benefits, will allow them to deduct 50% of the cost of the property´s construction from their tax liability in the first year, enjoy certain "cash back" incentives and the ability to purchase 2 properties effectively for the price of 1 and a half whilst paying lower than normal property taxes.”
One of the most attractive projects currently available and likely to directly benefit from any extension to the GO Zone Act is Bayside Park near Biloxi where members of the local Builders’ Association recently worked together to spring clean the entire neighbourhood ready for former and brand new tenants to move in to their GO Zone qualifying homes.
Bayside Park is a fabulous development of homes available for sale to international investors from just GBP 68,000 / EUR 85,000. The properties have 90% mortgage option available on them and follow Brad Pitt’s now world famous ethical and ecological example of GO Zone construction by being built from a frame that consists of 75% recycled steel and by being constructed in such a way as to ensure as small a carbon footprint is created as possible from the construction and ongoing inhabitance of the home.
To learn more about Property Direct America, Bayside Park and GO Zone opportunities you can contact Property Direct America via their UK offices on 0207 043 0792 or visit their website www.propertydirectamerica.com.