How New Tax Laws Could Impact Real Estate Investors 

Major Uncertainty Surrounds Proposed Tax Changes

• Potential tax provisions could impact capital gains tax rates, 1031 Exchanges, tax carried interest, and more
• Few details exist and proposal has a long road through Congress before being signed into law

Changes to Tax Policy Could Have Broad Impacts

• Proposal would raise capital gains tax for those making over $1 million to same rate as ordinary income
• A $500,000 cap on 1031 Tax Deferred Exchanges would impair investors’ reinvestment into new properties
• This could weigh on investment and economic activity, in turn slowing the redevelopment of needed CRE

What Actions Should Investors Take?

• Consider selling now; the sales market is strong and future tax hikes could consume additional appreciation gains
• Exchanging properties while tax rules are known can help avoid risks from unexpected changes
• New policies could be voted on this year, changing the real estate landscape for years to come