FIRPTA Witholding Rate Increasing to 15%. No this is not some gastronomical malady associated with real estate! Here is the definition: " The Foreign Investment in Real Property Tax Act (FIRPTA) is a federal law that requires a “foreign person” to pay tax on the gain realized upon the sale of real property owned by that person." This money is withheld from the foreign persons sale proceeds. Now you know!
From Stuart Crawford at VIP Mortgage:
As we all know, the market is EXTREMELY volatile right now. A number of factors have caused volatility in global financial markets over the past week à Comments from central bankers around the world, slower growth in China, and U.S. economic data were some of the biggest influences. Despite several large daily moves, the net effect was small, and mortgage rates ended the week with little change.
Concerns about slower economic growth and low inflation prompted central bankers in Europe and Japan to hint this week that additional stimulus will be coming soon. On Thursday, the President of the European Central Bank (ECB) said that the ECB will consider more stimulus measures at its next meeting in March. Similarly, the head of the Bank of Japan suggested on Friday that more stimulus is on the way, possibly before the end of the month. If additional stimulus is announced, its type and its magnitude will determine its impact on mortgage rates.
Oil prices have been declining since the middle of 2014, and during this week they reached their lowest level in over a decade. This is one major factor holding down global inflation rates. In the U.S., the consumer price index (CPI) data for December released on Wednesday revealed that 2015 saw the second lowest annual rate of inflation in the last 50 years with an annual increase of just 0.7%. The only year with a lower rate was 2008, and a large decline in oil prices was a big reason then as well.
It had been anticipated that the decline in home sales seen in November would roll into the results for December, but the rebound was much larger than expected. After falling 11% in November, existing home sales jumped 15% in December. The decline in November was mostly due to closing delays caused by new federal rules, which pushed the closings into December. For all of 2015, existing home sales reached the highest level since 2006.
Looking ahead, the next Fed meeting will take place this Wednesday, so it will be interesting to hear what our country’s “financial experts” have to say about current events and future outlook. No change in the federal funds rate is expected, but investors will be watching to see what impact the decline in the stock market and in oil prices will have on future Fed policy.
Stuart can be reached at 480.776.2954