U.S. Multifamily Investment Market: New Tax Plan
Last week CBRE published a new report that analyzed the impacts of the new tax plan on the multifamily sector, in thirty-five of the largest U.S. markets. The new tax plan makes an increase in the standard deduction of $24,000 for a married couple, which is now available for renters as well. This change is a significate benefit for renters, indicating that renting over homeownership might be more favorable in the larger markets, such as Chicago, Denver, Miami, Philadelphia, Seattle and Washington D.C.
“The new tax policy’s raising of the standard deduction, combined with limitations on mortgage interest and state and local tax deductions, will significantly increase the attraction of renting versus buying housing,” said Spencer Levy, CBRE’s Senior Economic Advisor and Head of Research, the Americas. “This could potentially provide a boon to multifamily investors in many markets.”
“Overall, tax reform could provide a short-term boost to the U.S. economy by reducing corporate and individual tax rates, encouraging foreign earnings repatriation and incentivizing new capital formation and investment. How much it could stimulate overall economic growth in the long term is uncertain, but specific to the multifamily sector, it’s likely that we will see a boost in the multifamily investment market,” said Mr. Levy.
Are you considering a multifamily investment? Now might be the time to take advantage of the benefits the new tax plan has for investors.
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