The Issue: Our current tax system is cumbersome and in desperate need of updating. Current depreciation models do not accurately reflect the market reality for commercial building owners. In order to advance our industry and our economy, the tax code must be simplified and aligned with actual commercial asset and lease longevity.
BOMA’s Position: Comprehensive tax reform policies must encourage capital investment in commercial real estate and provide long term certainty and stability to the marketplace. BOMA members need the tax code to be remedied and the economic models that the tax codes relies upon to be updated. However, we are concerned that sweeping change could have unintended economic effects on both real estate transactions and current holdings. As Congress drafts legislation, lawmakers need to consider important transition rules, data-proven depreciation schedules and partnership and rent taxing rules. They also must preserve both 1031 "like-kind" exchanges and the carried interest provision for general partners in real estate ventures.
Tax Blueprint Concerns:
- • Commercial real estate contributes $235 billion to U.S. GDP, but the exclusion of certain provisions that currently encourage real estate as an investment, such as 1031 "like-kind" exchanges and carried interest, could curtail further growth.
- • The House GOP Blueprint is an incomplete picture of tax reform and does not offer incredibly important details on transition rules, partnerships rules, rules for REITS and how rents would be taxed.
- • One provision in the Blueprint, full expensing, is both unviable and economically destabilizing. Often referred to as "churning," this provision would encourage transactions for the sake of creating potential tax shelters not economic growth.
For more information please contact:
Emily Naden, Director of Federal Affairs, BOMA International, 202-326-6326, firstname.lastname@example.org