October 19, 2021

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5 real estate issues to watch in Dems’ $3.5T budget – The Real Deal

Sen. Chuck Schumer, President Joe Biden, Speaker Nancy Pelosi and House Ways and Means Chairm.......

Sen. Chuck Schumer, President Joe Biden, Speaker Nancy Pelosi and House Ways and Means Chairman Richard Neal (Getty/Illustration by Kevin Rebong for The Real Deal)

Federal lawmakers are hashing out a $3.5 trillion spending plan that could include billions of dollars for new affordable housing and incentives for cities to combat exclusionary zoning.

The House Ways and Means Committee on Monday outlined a series of tax reforms to help pay for the plan, including increases to the corporate tax rate, capital gains taxes and a 3-percentage-point surtax on individuals making more than $5 million a year.

Lawmakers are still drafting the spending plan, with congressional committees submitting recommendations through the reconciliation process — a faster path to approval that avoids a Republican filibuster in the Senate.

Nothing is final, but several proposals on the table could affect real estate. Here are five to watch as the debate heats up in the coming weeks:

​​1) 1031 exchanges safe, for now
The exchanges allow real estate investors to defer capital gains taxes by shifting the proceeds from a sold property into a new one. President Joe Biden has proposed eliminating the tax break for gains of more than $500,000.

Though the beloved, like-kind exchanges were not mentioned in the series of tax proposals laid out by House Democrats on Monday, it is too soon for real estate investors to celebrate. New tax treatments for such deals could appear over …….

Source: https://therealdeal.com/2021/09/14/5-real-estate-issues-to-watch-in-dems-3-5t-budget/