Industry News

NAIOP Survey Finds Tax Policies Most Significant to Commercial Real Estate

Wednesday, September 24, 2014

A recent NAIOP survey of developers, owners, investors and other commercial real estate development professionals, finds that tax policies have the most impact on business industry-wide with respondents overwhelmingly supporting NAIOP’s advocacy efforts in working with Congress to pass legislation that would overall expand access to capital and generate investment. Key findings include:

  • 90 percent cite capital gains rates as their top concern and oppose efforts to increase the capital gains tax rates.
  • 86 percent say leasehold improvement depreciation has a high impact on commercial real estate and support making permanent this temporary tax extender, which allows for a depreciation period of 15 years as opposed to 39 years.
  • 83 percent find carried interest – a key financial incentive to development deals currently taxed as capital gains – significant across the industry and oppose proposals to tax it at much higher ordinary income tax rates.
  • 77 percent also find like-kind exchanges, which provide liquidity to make deals work, essential and that altering current policies to restrict the use of like-kind exchanges would threaten liquidity of real estate markets, severely curtail transactions and deter ownership and development of distressed properties.

“NAIOP has long advocated that higher tax rates and longer depreciation periods do the opposite of spurring investment. Rather they create disincentives that actually prevent owners and developers from injecting capital back into the market and increasing property value through modernization and re-investment,” said Thomas J. Bisacquino, President and CEO, NAIOP. “The survey’s findings further reinforce that NAIOP’s legislative priorities are reflective of industry concerns.”

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