Investment in commercial real estate may jump due to new tax law

On Behalf of | Jan 25, 2018 | Commercial Real Estate

The brand-new tax law may draw more investors with high net worth in 2018. As a result, the commercial real estate market may begin to boom more than it has in a long time in New York and in other parts of the country. Real estate investing may become hotter this year for a couple of major reasons.

For one, under the law, investors can shift their money from equities to various pass-through entities. These entities may include limited liability companies and S corporations, for example. This shift in investors’ capital will likely drive up the demand for a wide range of commercial real estate property.

Another advantage of the new law is that the depreciation deduction outlined in Section 179 is being expanded. Under the new law, commercial real estate owners can treat improvement costs as direct expenses in the years during which they were installed. These improvements may include security systems, roofs and HVAC systems, for instance. Before the new law, such items were capitalized, with only a tiny amount being expensed every year. The change to Section 179 is retroactive to tax year 2017.

More investors may be excited to dive into the New York commercial real estate market thanks to the new tax bill. However, for those who are not familiar with the industry, the move can be intimidating. It can be just as overwhelming and complicated for those who have purchased commercial real estate property before, though, as every deal is different. Plus, New York’s real estate market is particularly competitive. Fortunately, an attorney can provide the guidance needed to successfully complete transactions and thus achieve one’s personal commercial real estate goals in the Empire State.

Source:, “New Tax Laws Likely to Increase HNW Investment in Real Estate“, John Egan, Jan. 24, 2018