Steve Wamhoff has an interesting commentary in Forbes that says that the tax plan will be a boom for real estate investors, Real Estate Investors Will Love This Last-Minute Change to the Tax Plan.
The final bill provides a deduction for pass-through income that is supposed to benefit those business owners who create jobs. The original version of this deduction, which was in the earlier language passed by the Senate, limited it to half of the compensation paid to employees by the pass-through business.
But a provision inserted in the final bill also allows the deduction to be claimed up to a certain fraction of the company’s depreciable property—property like buildings that lose their value over time. This makes the deduction easier to claim for companies with few employees but a lot of buildings.
Guess what kind of business owns this type of property but has few employees? Real estate firms.
Looks like there is a good change there will be a number of ways to leverage real estate investing under the tax plan in 2018. In addition to real estate firms, a lot of corporations will have incentives to look at real estate investing as part of their corpoarate strategy.
We may see more companies look to invest in new headquarters, by renovating and adding overall value to older office buildings or corporate centers, as part of offering the amenities their employees will want.