Landlords Just Got a Big Tax Break

Through a late provision added to the GOP tax plan last weekend, real estate investors may be on course for a multimillion-dollar tax break.

The change would allow real estate investors to take advantage of a new break that provides a 20 percent deduction on taxable income for pass-through companies. A pass-through is a special type of corporate structure, popular among small business owners. These firms avoid the double taxation of paying corporate and individual taxes. Instead, taxes are applied solely at the individual level.

Ultra-wealthy real estate investors are the first beneficiaries of the tax provision, but anyone who invests in rental real estate may also stand to benefit. This includes President Donald Trump, and other policymakers like Senator Bob Corker of Tennessee, who voted against an earlier version of the legislation and on Friday said he’d support the revision.

While the tax cut is a boon for private real estate investors, it will likely make the inventory shortage worse–the most pressing issue in housing.

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Tami L Barber

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Encore Lending Group LLC

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