When the US sneezes continued...

Ok, so here's what I can tell on this tax change to US expats that makes their housing allowances taxable.

It looks like both the House and Senate have approved this bill (click here for PWC Bermuda's analysis), so it goes on to President Bush to be signed, which he is expected to do.

So it will be interesting to see what the impact is on the local real estate market, if any. Maybe the companies here will just make this tax neutral to their employees, grossing up for the associated tax impact, or maybe they'll start getting a little more sensitive on rents.

That doesn't come without a cost. High rents has been one way that international business dollars have been transferred into the local economy (understanding the trickle down effect), and those folks who are highly leveraged in Bermuda real estate based on high expectations of rental returns from American expats with housing allowances, might get a little skittish.

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