Katrina Tax Break Promotes Luxe Condos
Federal tax breaks billed as providing rebuilding aid for areas of Louisiana, Mississippi and Alabama that were devastated by Hurricane Katrina are promoting construction of luxurious homes far inland.
As red tape and disorganization, among other issues, delay rebuilding in some of the most severely damaged areas, the tax breaks are promoting the construction and sale of $1 million condominiums near the University of Alabama’s football stadium in Tuscaloosa, reports the Associated Press. Some 200 miles from the coast, the city saw only heavy rain and scattered wind damage from the August 2005 storm.
The Gulf Opportunity Zone Act of 2005, or GO Zone, also allows not only owner-occupants but investors to benefit from federal tax breaks intended to promote post-Katrina reconstruction. Its scope is now controversial, although benefits used by the well-to-do are not taking money away from other storm victims, since the tax breaks are unlimited, AP writes.
“The GO Zone extends so damn far, but the people who need it the most can’t take advantage of it,” says John Harral. He is a lawyer in Gulfport, Miss.