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10 Things You Need to Know About Tax Reform and the Apartment Industry

Tax Reform

1. Apartment firms pay taxes when they build, operate, sell or transfer communities to their heirs.

2. Tax reform is the process of changing the way the federal government manages or collects taxes.

3. The last comprehensive tax reform occurred in 1986 with devastating effects on the apartment industry that lasted for years.

4. Tax reform in 2017 has the potential to significant reshape the apartment industry – for better or worse.

5. The apartment industry’s goal is to support tax reform legislation that promotes economic growth and investment in rental housing without unfairly burdening apartment owners and renters relative to other asset classes.

6. The industry is already encouraging Congress to support a tax reform package that will:

  • Protect Flow-Through Entities (e.g., LLCs, partnerships, S Corporations, etc.) which is the industry’s dominant business structure.
  • Maintain Like-Kind Exchanges that enable property owners to defer capital gains tax if they exchange it for another comparable property.
  • Retain the Deduction for Business Interest to incentivize real estate investment.
  • Ensure Depreciation Rules Avoid Harming Real Estate to reflect the critical role that cost recovery rules play in real estate investment.
  • Protect the Low-Income Housing Tax Credit (LIHTC) to ensure this major financing incentive for low-income housing development continues unharmed.

7. For the apartment industry to succeed, every industry member must be actively engaged in advocating for supportive tax reform legislation.

8. Being an advocate does not mean you need to be a tax expert. NAA and NMHC employ lobbyists and staff who are subject matter experts and will provide all the necessary resources to help you.

9. Being an advocate does mean that you must to be ready to act when your voice is needed with your members of Congress.

10. Find out how you can advocate for tax reform by contacting NAA Government Affairs.