Real Estate Group Makes Recommendations on CRE Tax Reform

center_img The “”Real Estate Roundtable””:, a group of leaders representing real estate businesses and trade associations, published a release urging lawmakers to take a pro-growth approach to tax reform that considers the commercial real estate (CRE) sector’s role in the larger economy.[IMAGE]In a letter, the group says a successful restructuring of taxes should recognize “”commercial real estate’s vast economic contributions”” and include appropriate “”transition rules”” to minimize disruptions to real estate and other economic sectors.””The nation’s tax laws need to be revamped to unleash entrepreneurship, investment, capital formation and job creation,”” Roundtable president and CEO Jeffrey DeBoer wrote to Rep. “”Dave Camp””: (R-Michigan), chairman of the “”House Ways and Means Committee””: “”But this process poses risk and, therefore, it must be undertaken with great care.””DeBoer’s letter goes on to urge the committee to “”be mindful of how proposed changes in commercial real estate taxation can dramatically affect the health of the U.S. economy, jobs, retirement savings, lending institutions, pension funds, and, of course, local communities.””[COLUMN_BREAK]As an example, DeBoer recalls the 1986 Tax Reform Act on CRE values, financial institutions, and tax bases, which he asserts had a “”destabilizing effect … due largely to significant policy changes that were applied to pre-existing real estate investments.””””It took years for the overall industry to regain its productive footing, and certain aspects of the economy never recovered,”” he wrote.The Roundtable’s letter also called on tax-writers to recognize CRE’s role as a contributor to–and reflection of–the economy, noting that the industry generates as much as 70 percent of tax revenue in many local jurisdictions, helping to pay for public services like education and law enforcement. “”Rational taxation of real estate assets and entities promotes job creation and facilitates sound, environmentally-responsible real estate investment and development, which contributes to strong property values and well-served, livable communities,”” DeBoer explained.The letter suggests a few broad reform guidelines for CRE: First, changes should be relatively simpler (“”at least simpler than today’s system””) and should promote economic growth across all sectors. In addition, real estate should be treated consistently with other types of businesses, and new real estate activities should not be given an advantage over existing ones. Finally, the group urges for reform that assures predictability for long-term investment and provides for a reasonable transition period that minimizes dislocation in real estate markets.The Roundtable also announced it will follow up with more specific comments and recommendations to various tax reform working groups for the Ways and Means Committee. in Data, Government, Origination, Secondary Market, Servicinglast_img

Leave a comment

Your email address will not be published. Required fields are marked *