While tax reform legislation is unlikely to move forward in Congress this year, the House and Senate tax-writing committees are working feverishly on proposals that could see action in 2017. The multifamily industry used an April 26 Senate Finance Committee tax reform hearing on business tax reform to remind lawmakers about key elements that should be preserved in any overhauled system. Multifamily owners, operators and developers pay federal tax at each stage of an apartment’s lifecycle - when properties are built, operated and sold or transferred to heirs - and have a huge stake in the outcome of reform of the nation’s tax code.
As a result, in a statement for the hearing record, NMHC/NAA insisted that any tax reform proposal must:
- Protect pass-through entities from higher taxes or compliance burdens;
- Ensure depreciation rules avoid harming multifamily real estate;
- Retain the full deductibility of business interest;
- Preserve the ability to conduct like-kind exchanges;
- Maintain the current law tax treatment of carried interest;
- Preserve and strengthen the Low-Income Housing Tax Credit;
- Maintain the current law estate tax;
- Reform the Foreign Investment in Real Property Tax Act to promote investment in the domestic apartment industry; and
- Improve incentives for energy efficiency in commercial buildings and multifamily properties.
joined a May 10 coalition letter urging Congress to preserve Section 1031
like-kind exchanges in any reformed tax system because they play a significant role,
and are widely used, in our industry. Multifamily property owners use section
1031 to efficiently allocate capital to optimize portfolios, realign property geographically
to improve operating efficiencies, and manage risk.
Current-law like-kind exchange rules, ultimately, help our industry to function smoothly by allowing capital to flow more freely, which also supports vital economic growth and job creation nationwide.
- Treasury and IRS Issue Proposed Carried Interest Regulations
- IRS Issues Final Business Interest Deductibility Regulations Favorable to Multifamily
- IRS Provides Tax Relief to LIHTC Projects Due to COVID-19
- Treasury and IRS Issue Proposed Regulations for Like-Kind Exchanges
- NMHC Joins Broad Coalition Calling on Congress to Enhance LIHTC in COVID-19 Response Package