What a Biden Tax Plan Might Hold for Commercial Real Estate

President-elect Biden’s policies are likely to mark a distinct departure from those under the Trump Administration and, in many cases, won’t be as favorable for the commercial real estate sector. But a full accounting of the expected policies presents a range of plusses and minuses for the industry. In the first of a two-part article, I examine the tax proposals.

With one of its own in the White House, the commercial real estate sector was treated well by the Trump Administration. The property industry benefited from generally pro-business policies and as well as more relaxed banking and environmental regulation. Investors benefited from President Trump’s signature legislative achievement, the Tax Cuts and Jobs Act (TCJA) enacted in late 2017. The new tax code provided some new special benefits for the industry, including opportunity zones, a 20 percent pass-through deduction for certain types of qualified business income, and bonus depreciation for certain assets. The TCJA also lowered tax rates on both corporate and individual income, reducing tax liabilities for commercial property owners. And perhaps more importantly, the law preserved several significant benefits that already existed—notably tax-free 1031 exchanges and carried interest—that had been targeted in earlier versions of the legislation.

This article was published on Propmodo.