The U.S. commercial real estate industry is pushing for tax relief and incentives championed by former Republican President Donald Trump to continue in the next administration, as the sector struggles with surging delinquencies, record vacancy rates, and elevated costs of financing.
Commercial real estate is especially vulnerable to higher taxes because its high fixed costs make it less able to offset them, according to industry trade groups. They said they are particularly concerned about key tax breaks being retained or left unchallenged in the coming years.
“‘Do no harm’ is the biggest thing with real estate organizations,” said David McCarthy, the managing director and head of legislative affairs at the Commercial Real Estate Finance Council, a nonpartisan trade group.
“Given that the nature of real estate is not super liquid, anything that raises costs now would come at the worst possible time.”
Key measures that the industry is concerned about preserving include pass-through deductions, like-kind exchanges and low capital gains taxes. Trump has endorsed making his tax cuts permanent although he has not been specific about these measures. Many of his 2017 tax cuts are set to expire next year.
So far, campaign contributions from the finance, insurance and real estate sectors favor Trump, with $234.9 million donations to the former president versus the $117 million in giving to Vice President Kamala Harris, a Democrat, according to data from politics money tracker OpenSecrets.
Industry trade group the National Association of Realtors has also donated more to Republicans, with $5.2 million to the GOP versus
$3.9 million to Democrats.
“Regardless of who is in office in January, we will be dealing with the tax cuts … expiring at the end of 2025, and we want to keep those,” said NAR director of commercial and policy oversight Erin Stackley.
The Harris and Trump campaigns did not respond to requests for comment.
Source: Reuters
