$858B Tax Deal Still Under Debate
- Dec 15, 2010
December 14, 2010
By Barbra Murray, Contributing Editor
Passage of the White House-proposed and the Republican-supported $858 billion tax package, a deal that is on the verge of making its way through the Senate, would have far-reaching implications–even for commercial real estate. Some industry experts say the extension of the Bush-era tax cuts would encourage commercial real estate investment.
They say it cannot buy you happiness, but, as has been asserted in lyrics and by many a modern-day amateur philosopher, money changes everything. And the money that those with super-deep pockets would continue to save if the Bush tax cuts are held over for two years would make a difference in the property investment world. “If the Bush tax extension doesn’t pass, the increase in the tax rate to 39 or 40 percent would have a negative impact on commercial real estate,” Charles Achilles, spokesperson on legislative affairs at CCIM, told CPE. “If there is a new tax law where people feel comfortable spending money on investments, that should be positive for the general commercial real estate industry. The higher the tax code for anyone, the less likely they are going to invest in real estate.”
According to Achilles, REITs, syndications and investment partners are all likely to pull back if the tax cuts are not extended. However, the operative word remains “if,” he said. “This bill could ultimately be totally different, but if it passes with an extension, that would be better for real estate than it would be to have increased taxes.”
Congress will soon be in recess, and when it reconvenes in January, Republicans will have control of the House.