Masks could prevent business closures, homeownership could become more affordable, and the 1031 exchange may go away.
If you're a real estate investor, you should know that the Biden win could result in a number of near-term and long-term changes, according to an article in Millionacres/Motley Fool. Millionacres author Maurie Backman gives these 3 predictions for real estate investors, but here are the highlights from those points:
- A mask mandate could prevent business closures. Whether or not you agree with it, forcing Americans to wear masks in public could actually work wonders for the economy. If masks prove effective at curbing the spread of the virus, the nation can avoid widespread closures that hurt businesses small and large.
- Homeownership could become more affordable. Biden plans a $15,000 tax credit for qualified homebuyers. Biden also intends to work with Congress to establish a new renter's tax credit, the goal of which would be to reduce rent and utilities to 30% of income for low-earning tenants who make too much to qualify for housing vouchers. Biden also wants a tax credit for renters, which could make it easier for tenants to keep up with their rent, thereby giving landlords more income stability.
- The 1031 exchange could go away. Real estate investors are privy to a number of tax breaks, one of which is the 1031 exchange. Also called a like-kind exchange, this loophole allows investors to unload one piece of real estate for another without paying capital gains taxes on that sale. These like-kind exchanges are estimated to account for as much as 20% of all commercial real estate deals nationally. Biden, however, has talked about eliminating the 1031 exchange. If that ends up happening, real estate investors could see their tax burdens skyrocket.
Source: Rise and Shred -- Motley Fool