New Tax Law Favorable to Commercial Real Estate
|Copyright 2014 by Virgo Publishing.|
|Posted on: 12/30/2010|
On Dec. 17, President Obama signed an $859 billion tax cut and stimulus package that should strengthen commercial real estate and spur economic recovery. The legislation includes two tax extensions that will significantly influence the commercial real estate sector: the continuation of the 15 percent tax rate on capital gains through 2012, and the extension of the 15-year timeline for depreciating leasehold improvements through December 2011, retroactive to Jan. 1, 2010.
As a member organization of The Real Estate Roundtable (RER), a non-profit public-policy organization that represents the interests of real estate, the national Self Storage Association backed the tax provisions, which should enable investors to move forward with greater confidence. Based in Washington, D.C., RER focuses on policy areas governing tax, capital and credit, environment and energy, and homeland security.
According to the SSA, extending the 15 percent capital gains tax rate should encourage a range of desirable economic activities: the acquisition and development of commercial properties; lending to finance or refinance investment in those properties; and the employment of skilled workers involved in construction, renovation and remodeling.
Specifically, the new legislation will:
Since jobs are essential to driving business demand for commercial space, RER welcomes the tax package and is hopeful it will help spark job creation in the private sector.
“This breakthrough on taxes couldn’t be more welcome,” said RER President and CEO Jeff DeBoer to GlobeSt.com. “By offering some predictability on tax policy—albeit temporary—this new law will allow businesses to better calculate their future costs, giving many of them more confidence to proceed with hiring and expansion plans.”