Author: Trey Jackson

Coalition Urges Treasury to Withdraw FIRPTA Look-Through Rule

Posted on by Trey Jackson

On Thursday, The Real Estate Roundtable (RER) wrote to  U.S. Treasury Secretary Scott Bessent encouraging the Treasury Department to withdraw regulations issued last year under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). (Letter)

Why It Matters

  • FIRPTA imposes capital gains tax on foreign investors that invest in U.S. real estate.  The discriminatory tax does not apply to any other asset class. 
  • For several years, RER and other stakeholders have worked with policymakers to reform FIRPTA and remove tax barriers that deter capital formation and investment in U.S. real estate and infrastructure.  In 2015, those efforts led Congress to enact a new exemption from FIRPTA for foreign pension funds and other helpful FIRPTA reforms.
  • In April 2024, however, Treasury issued final regulations that expanded the reach of FIRPTA to common investment structures by redefining what constitutes a domestically controlled entity.
  • The 2024 regulations invented a new look-through rule to determine whether an entity is a domestically controlled REIT exempt from tax under FIRPTA.  The practical effect of the regulations is to subject more foreign investors to U.S. taxation and impede capital formation for job-creating U.S. real estate and infrastructure projects (Roundtable Weekly, July 2024)

Roundtable Advocacy

FIRPTA
  • In a cover letter accompanying a more detailed legal and economic analysis, RER President and CEO Jeffrey DeBoer wrote this week that in issuing the new look-through rule, “Treasury reached well beyond its regulatory authority and invented a rule that contradicts the statute and is damaging the U.S. real estate market.”  (Real Estate Group Seeks Withdrawal of Look-Through Rule, Tax Notes March 20)
  • “[T]he Look-Through Rule reversed decades of well-settled tax law, severely misconstrued the statute, and contradicted Congressional intent,” wrote DeBoer. 
  • The letter described the economic benefits of inbound real estate investment.  “When invested in U.S. real estate, foreign capital puts contractors, tradesmen, and others to work constructing, upgrading, and improving properties. Pooled with U.S. partners and their expertise, foreign investment helps create productive assets, such as shopping centers and apartment buildings, which revitalize communities and increase the supply of affordable housing.”
  • This week’s letter follows repeated efforts by RER and others to stop the regulations from moving forward during the Biden Administration.  House Ways and Means Committee Members Darin LaHood (R-IL) and Carol Miller (R-WV) urged former Treasury Secretary Janet Yellen to drop the regulations when they were in proposed form.  (Roundtable Weekly, Aug. 2023) 
  • The legal case against the FIRPTA regulations is even stronger today, in the wake of the Supreme Court’s Loper Bright decision in which the Court significantly narrowed the deference to which regulatory agencies are entitled when rulemaking.  
  • RER’s submission included a detailed legal and economic analysis prepared by RER’s Tax Policy Advisory Committee FIRPTA Working Group and principally drafted by TPAC Members David Polster and Nickolas Gianou of Skadden, Arps, Slate, Meagher & Flom LLP.  (Analysis)

In addition to seeking formal withdrawal of the April 2024 regulations, the letter urges the Treasury Secretary to issue sub-regulatory guidance immediately that would allow taxpayers to rely on the forthcoming withdrawal before it is finalized.  The Trump Administration has prioritized removing regulations that unnecessarily impede economic activity.

With Shutdown Averted, GOP Sharpens Focus on Tax Priorities

Posted on by Trey Jackson


Tax and fiscal policy are now at the top of the GOP’s agenda after a stopgap spending bill passed last Friday, preventing a potential government shutdown. House and Senate GOP members have just a few weeks of session before the long Easter and Passover recess to make significant progress on a budget resolution.

Government Shutdown Averted

  • Congress avoided a shutdown last Friday after ten Senate Democrats, including Minority Leader Chuck Schumer (D-NY), voted to advance the GOP’s stopgap spending bill. The six-month continuing resolution funds the federal government through September. (NBC News, March 14)

  • Schumer rallied enough Democrats in the Senate to approve the measure in a key procedural vote. Responding to outspoken disagreement within his party about voting for the GOP’s spending bill, Schumer said, “I knew it was a difficult choice, and I knew I’d get a lot of criticism for my choice, but I felt as a leader I had to do it.” (ABC News, March 18)

Tax Policy Update

  • With the risk of a shutdown now in the rearview mirror, House and Senate GOP leaders are focusing their attention on a reconciliation package that would advance their tax priorities, including extending key provisions of the 2017 Tax Cuts and Jobs Act (TCJA). (NYT, March 21)

  • The House passed its version of the budget resolution last month, but the bill has seen little movement in the Senate due to divisions within the GOP over budget constraints and offsets.
  • Congressional Republicans want to make the TCJA tax cuts permanent, which will be challenging under the House budget resolution’s current $4.5 trillion tax cut ceiling.

  • President Trump, Senate GOP leadership and House Speaker Mike Johnson (R-LA) support using a “current policy baseline” approach, a budget scoring method that would allow Congress to extend the TCJA tax cuts without adding to the deficit on paper and give them more room to include the administration’s other tax priorities. (Politico, March 13)

  • Senate Budget Committee Republicans are planning to hold meetings with the Senate parliamentarian’s office to determine if this approach complies with reconciliation rules. GOP lawmakers need guidance by early April to move forward with large parts of the budget resolution. (Punchbowl News, March 18)

  • The challenge of balancing tax relief with deficit concerns has fueled high-level discussions between Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD). Thune acknowledged the difficulty of the process, saying, “Both of us understand we’ve got to get this done. And we’re trying to figure out the best way to do that.” (Punchbowl News, March 19)

Key Tax Provisions At Stake

  • While GOP leaders seek guidance on the “current policy baseline” approach, House Ways and Means Committee and Senate Finance Republicans are continuing to debate key tax provisions of the bill.

  • Senate Finance Chair Mike Crapo (R-ID) mentioned during an appearance at the U.S. Chamber of Commerce that there are over 200 proposals under consideration—including reducing the estate tax, expanding the Opportunity Zone program and enhancing the Low-Income Housing Tax Credit (LIHTC). (PoliticoPro, March 12)

  • Expanding Opportunity Zones and the LIHTC would help expand the supply of affordable housing and address the U.S. housing crisis. (Roundtable Weekly, March 17)
  • To offset the cost of the large number of tax proposals under consideration, Republicans are considering the repeal of Inflation Reduction Act (IRA) energy tax credits. IRA programs have come under increasing scrutiny by the Trump administration as it looks to roll back Biden-era energy policies.

  • However, a new report warns that eliminating these credits could result in nearly 790,000 job losses and increase consumer energy costs by $6 billion annually by 2030. In light of these concerns, 21 House Republicans have advocated for preserving the energy tax credits—pointing out that they are critical to help the U.S. meet Trump’s goal of becoming “energy dominant.” (PoliticoPro, March 20; Politico, March 10)

  • Other lawmakers have raised potential restrictions on the deductibility of state and local business property taxes, also known as “business SALT,” as a revenue offset for the tax bill. This tax change would have devastating consequences on the commercial real estate industry and the broader economy. (Letter, March 7 | Roundtable Weekly, March 17 | (BisNow, March 14)

  • RER has urged members to contact their representatives to oppose restrictions on business SALT that would discourage new investment and undermine housing affordability nationwide.

GSA’s Plans for Federal Leases

  • In other news this week, the General Services Administration (GSA)—under directions from the Elon Musk-led Department of Government Efficiency (DOGE)—will begin to vacate nearly 800 offices across the country this summer. (AP, March 14)

  • The news has generated great uncertainty for federal agencies using these offices and building owners who lease to the government. The Associated Press released a full list of office locations it found would be affected by the planned lease terminations. (AP, March 14)

Looking Ahead

  • With Congress racing to cut through key process hurdles before the April 13 recess, GOP leaders are hoping the concurrent budget resolution will start to finally take shape—though tough decisions remain ahead.

RER will continue to engage policymakers on important tax priorities for the real estate industry and analyze the implications of the GSA’s federal lease plans on commercial real estate across the country.

Fed Holds Steady on Rates Amid Economic Uncertainty

Posted on by Trey Jackson

The Federal Reserve announced Wednesday that it will maintain its benchmark federal funds rate at the current 4.25-4.50 percent range, citing heightened economic uncertainty linked primarily to recent tariff policies.

Fed’s Decision

  • The decision reflects cautiousness by Fed policymakers amid rising inflation expectations and slower projected economic growth. (AP, March 19)
  • Fed Chair Jerome Powell highlighted ongoing economic uncertainty, citing the Trump administration’s potential “significant policy changes” on trade, immigration, fiscal policy, and regulation. (Opening Statement, March 19)
  • “It’s the net effect of these policy changes that will matter for the economy and for the path of monetary policy,” Powell said. “Uncertainty around the changes and their effects on the economic outlook is high.”
  • Fed Chair Jerome Powell also emphasized that uncertainty is “unusually elevated,” largely due to the Trump administration’s extensive import tariffs.
  • “Clearly, a good part of [inflation] is coming from tariffs,” Powell stated, adding that while tariffs may temporarily delay inflation reduction, he believes the effect will ultimately prove transitory.

Looking Ahead

  • Powell stated that the Fed will take a patient, data-driven approach to future rate decisions.
  • “We’re not going to be in any hurry to move,” Powell said. “Our current policy stance is well-positioned to deal with the risks and uncertainties we face.”
  • According to the Fed’s quarterly projections, officials expect GDP to grow 1.7 percent this year, a drop from their 2.1 percent estimate in December.
  • While Fed policymakers still anticipate two quarter-percentage-point rate cuts by year-end, consistent with their December forecast, this expectation primarily reflects concerns over slowing economic growth counterbalancing rising inflation and what Powell described as uncertainty-driven “inertia” given the unclear outlook. (Reuters, March 19)

Pressure From The White House

  • President Trump criticized the Fed’s cautious approach via Truth Social, advocating for rate cuts, stating, “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing.” (ABC News, March 20)
  • Earlier this week, President Trump nominated Federal Reserve governor Michelle Bowman as vice chair for supervision, the central bank’s top regulatory position. (Bloomberg, March 17)
  • Senate Banking Committee Chair Tim Scott (R-SC) applauded the nomination and called Bowman an important voice in “pushing back on burdensome rules.”

Implications for CRE

  • The decision to maintain current interest rates carries significant implications for commercial real estate. Stable and lower interest rates can provide a more predictable environment for financing and investment decisions.
  • The Fed’s decision reinforces findings from our Q1 2025 Sentiment Index that the CRE industry remains in a transitional period. Released in February, the Index showed signs of market stability—but also lingering uncertainty over tariffs, expiring tax cuts and regulatory reforms that could slow investment and economic growth. (Roundtable Weekly, Feb. 21)
  • Heightened economic uncertainty, particularly from tariff policies, could dampen investment activity and make it challenging to attract foreign capital—both critical elements needed to drive economic growth.
  • Reduced investment activity also risks hindering development projects, including the creation of affordable housing, and could slow ongoing efforts to revitalize communities and cities still recovering from pandemic disruptions. (CBRE, March 19)

RER will continue to track coverage on interest rates and tariffs, and the implications for commercial real estate.

Real Estate Industry Fights to Preserve Business Property Tax Deductions Amid GOP Tax Negotiations

Posted on by Trey Jackson

As House and Senate Republicans work to develop the details of their tax legislation, the real estate industry is mounting a unified defense against possible limitations on the deductibility of state and local business property taxes. (BisNow, March 14)

Why It Matters

  • Last week, The Real Estate Roundtable (RER) and sixteen other national real estate organizations wrote to members of the House Ways and Means and Senate Finance Committees urging them to oppose any proposal that would cap or eliminate the deductibility of state and local business property taxes.  (Roundtable Weekly, March 7)
  • The House Ways and Means Committee is exploring reductions to business-related state and local tax deductions—including property taxes—as part of its effort to offset the costs of a broader GOP tax package. (PoliticoPro, March 11)
  • At a White House meeting on Thursday between President Trump and Senate Finance Committee Republicans, Sen. Ron Johnson (R-WI) said Senators raised corporate SALT as a potential offset.  Several Senators reportedly “pitched Trump on repealing the corporate state and local tax deduction.”  (CQ, March 13; Politico, March 13)
  • A cap on the deductibility of property taxes paid by U.S. businesses could have devastating consequences for commercial real estate owners, developers, and investors nationwide.
  • State and local property taxes represent 40% of the operating costs of U.S. commercial real estate, a greater expense than utilities, maintenance, and insurance costs combined.
  • The potential tax change could reverse the benefits of the 2017 Tax Cuts and Jobs Act (TCJA) and Section 199A, potentially raising effective tax rates on real estate to 1970s-era levels near 50%.
  • With elevated interest rates, rising insurance premiums, and increased operational expenses pressuring property owners across asset classes, industry advocates argue that eliminating the deduction would only deepen existing challenges, resulting in “job losses, pressure on rents, stress on the banking system, and reduced housing construction.” (BisNow, March 14)

Tax Talks

  • Both chambers had a busy week meeting with committee members and Trump administration officials to discuss the overall framework for their respective tax agendas.
  • House Ways and Means Committee Republicans met with Treasury Secretary Scott Bessent on Monday to review tax options, while Senate Finance Committee members separately convened to discuss their approach, revealing significant differences in timeline and strategy. (PoliticoPro, March 10)
  • Ways and Means Committee Chairman Jason Smith (R-MO) has already said that the instructions laid out in the House-approved budget resolution won’t allow for a permanent extension of Trump’s tax cuts, but would allow for an eight- to nine-year extension. (Politico, March 10)
  • GOP lawmakers from high-tax states, including New York, New Jersey, and California, continue to demand that any final tax legislation include lifting or fully repealing the $10,000 SALT cap for individual taxpayers. President Trump has expressed support for repealing the SALT limitation.
  • House and Senate Republicans have yet to reach an agreement on a budget plan that would set the framework for Trump’s legislative agenda.
  • During the White House meeting with Senate Finance Republicans, Trump raised his Gold Visa card concept as a way to pay for the package, along with tariffs and other options.  (PoliticoPro, March 13)

Looking Ahead

  • House Republicans aim to pass legislation extending Trump-era tax cuts by Memorial Day, while Senate Republicans suggest an August timeframe might be more realistic, with Sen. John Cornyn (R-Texas) noting “there’s no consensus” in the Senate. (Politico, March 10)

RER will remain actively engaged with lawmakers, reinforcing the message that preserving full deductibility of business property taxes is essential to protecting jobs, promoting investment, housing affordability, and ensuring continued economic stability nationwide.

Affordable Housing in Focus on Capitol Hill

Posted on by Trey Jackson

As the nation continues to grapple with housing affordability challenges, recent developments in Washington signal increased attention on this critical issue. From new leadership at federal housing agencies to congressional hearings focused on supply constraints, policymakers are exploring multiple avenues to address the ongoing crisis.

Congressional Focus on Housing Supply Constraints

  • This week, the Senate Banking, Housing and Urban Affairs Committee held a hearing titled “Housing Roadblocks: Paving a New Way to Address Affordability,” which explored various factors limiting housing supply and driving up costs. (Watch Hearing)
  • Discussions during the hearing were centered on the challenges of restrictive zoning laws, delayed permitting, land use policies, and escalating material costs.

  • Last week, the House Financial Services Subcommittee on Housing and Insurance held a hearing on “Building Our Future: Increasing Housing Supply in America” which focused on strategies to address the housing shortage. (Committee Memo, March 4)

  • Both Republicans and Democrats on the subcommittee agreed that restrictive zoning laws, high construction costs, and regulatory barriers at the state, local, and federal levels are exacerbating the housing crisis. (CREFC, March 11)

  • Throughout both hearings, solutions for addressing these challenges echoed RER’s housing policy recommendations of simplifying permitting and zoning processes, promoting modular housing construction, strengthening public-private partnerships, and expanding housing incentives such as the low-income housing tax credit (LIHTC).

Pulte Confirmed as FHFA Director

  • On Thursday, the Senate confirmed Bill Pulte as the new director of the Federal Housing Finance Agency (FHFA) in a 56-43 vote, marking one of the few Trump cabinet nominations to receive some bipartisan support. (Politico, March 13)
  • RER wrote to Senate leadership this week in support of Pulte as director of FHFA. “His knowledge and experience will prove to be critical in overseeing the Government Sponsored Enterprises—Fannie Mae and Freddie Mac, the key financing sources for America’s housing industry—as well as the 11 federal home loan banks, who play a critical role in investing in local needs including housing, jobs and economic growth,” the letter stated.
  • Speaking with CNN, Pulte said that privatizing the government-sponsored enterprises (GSEs) is not the Trump administration’s immediate priority. Instead, he stressed the need for a “significant study” on the potential impact on mortgage rates before any such move. (GlobeSt. March 14)

  • “Fannie and Freddie shouldn’t be in conservatorship forever. But it’s critical to ensure any discussion about exiting conservatorship needs not only to ensure safety and soundness but how it would affect mortgage rates.” (CNN, March 13)

Opportunity Zones Study

  • The study found that the OZ incentive has nearly doubled the number of new housing units in these areas, generating more than 313,000 new residential addresses between 2019 and 2024.
  • The authors also found that this new housing came at a low fiscal cost per unit, suggesting that OZs are proving to be one of the most effective tools in the federal housing policy toolkit.

  • RER has long championed (OZs) as a transformative tool to stimulate economic growth and increase the supply of affordable housing in low-income areas. By creating tax incentives for investments in designated low-income census tracts, OZs have channeled investment into areas most in need.

  • RER has called on Congress to improve and extend the program, which is set to expire along with other key provisions of the TCJA at the end of this year.

Sustained recovery and resolution of the affordability crisis will require continued policy reform, increased housing supply, and greater collaboration between the public and private sectors. RER remains committed to working with policymakers to implement solutions that address both immediate needs and long-term challenges in the housing market.

Lawmakers Navigate Action-Packed Week on Capitol Hill

Posted on by Trey Jackson

Contentious policy discussions surrounding the economy, immigration and government spending continued this week in Washington as lawmakers work towards an agreement on a federal spending bill.

State of Play

  • The House narrowly approved a continuing resolution (CR), on March 11 to keep the government funded through September. Speaker of the House Mike Johnson (R-LA) managed to largely keep his GOP conference united, passing the measure days ahead of a possible government shutdown. (CBS News, March 11)
  • To prevent a shutdown, the Senate must approve a measure before the current funding expires on Friday night. Republicans will require support from at least seven Democrats to reach the 60-vote threshold necessary to overcome a filibuster. (Financial Times, March 12)
  • Senate Minority Leader Chuck Schumer (D-NY), told his caucus privately on  Thursday, and later in a floor speech, that he would vote to advance a GOP-written stopgap to fund the government through September. While he described the Republican spending bill as “very bad,” he emphasized that the “consequences of a shutdown for America would be far worse.” (Politico, March 13)

National Flood Insurance Program (NFIP)

  • Included in the CR package, is the extension of The National Flood Insurance Program (NFIP).
  • If enacted, this will be Congress’s 32nd  short-term extensions of the NFIP. The Roundtable has been a long-standing supporter of a long-term reauthorization of the NFIP with appropriate reforms.
  • A long-term reform and reauthorization of the NFIP is essential for residential markets, overall natural catastrophe insurance market capacity, and the broader economy.

  • RER, along with its industry partners, will continue advocating for targeted policy solutions that can help alleviate increased insurance costs for housing providers nationwide. (Roundtable Weekly, Feb. 28)

Inflation Reduction Act

  • As Congressional Republicans look to offset trillions of dollars in proposed tax cuts in their budget bill, Biden-era provisions from the Inflation Reduction Act (IRA) have sparked debate. (Politico, March 10; Brookings, Jan. 6)
  • This week, a group of 21 House Republicans led by Rep. Andrew Garabino (R-NY), whose districts have benefited from billions in new investments due to IRA incentives, argued that energy tax credits and provisions for manufacturers and builders are essential in achieving President Trump’s goal for the U.S. to be “energy dominant”. (Politico, March 10)
  • In a letter to President Trump, the group asserted that eliminating certain credits could mean “drastically higher power bills for American families” and emphasized that “many credits were enacted over the course of a 10-year period, which allowed energy developers to plan with these tax incentives in mind.” (Reuters, March 11)

Immigration – Gold Card Proposal

  • On March 11, RER sent a letter to Commerce Secretary Howard Lutnick, expressing support for the “Gold Card” proposal. This concept aims to bolster U.S. economic growth, address the national deficit, and strengthen America’s competitive edge in the global marketplace.
  • The letter reiterated support for the existing EB-5 program, which allows foreign investors to obtain a green card by making substantial investments that result in jobs for American workers and funding for large-scale developments.
  • As RER’s letter emphasized, pairing the “Gold Card” program with the EB-5 framework offers a powerful, dual-track approach that will reform America’s visa system, attract top global talent, and drive foreign investment into strategic, job-creating projects. (Letter, March 11)

  • During a meeting with GOP Senators this week, President Trump discussed his “Gold Card” Program as a revenue source to address the national deficit.

Federal Workforce Cuts and GSA Leasing

  • Federal agencies faced a Thursday deadline to submit initial plans for sweeping workforce cuts and reorganizations, following President Trump’s directive for “large-scale reductions in force,” with a second round of plans due in April. (Politico, March 12)
  • The “Phase 1” agency cut plans due this week mark the first step in the Trump administration’s broader downsizing strategy, with “Phase 2” plans—detailing operational overhauls—due by April 14 and set for implementation by Sept. 30. (Politico, March 12)
  • A federal judge ordered the administration to rehire thousands of employees dismissed from six agencies, disputing the Trump administration’s justification for firing the probationary workers. (NYT, March 13)

  • RER will continue to track these developments and their potential implications for government leasing in Washington, D.C. and other major urban centers. (Roundtable Weekly, Feb. 7)

Both chambers are in recess next week and set to return to Washington on March 24.

RER Members: Call to Action—Oppose Proposals Limiting Deduction of State and Local Business Property Taxes

Posted on by Trey Jackson

The Real Estate Roundtable (RER) and sixteen other national real estate organizations recently wrote to Congress urging them to oppose any proposal that would cap or eliminate the deductibility of state and local business property taxes.  (Letter)

A cap on property tax deductibility could have devastating consequences for commercial real estate owners, developers, and investors nationwide.

Call to Action

The Real Estate Roundtable urges members to amplify this message to their representatives in Congress.

Click here to find your Representative.   Click here to find your Senators.      

Effects on CRE and the Broader Economy

  • Some lawmakers have raised “Business SALT” and potential restrictions on the deductibility of state and local property and income taxes as a possible revenue offset for the tax bill.
  • The ripple effects of this proposal would extend far beyond property owners to impact the broader economy and housing affordability nationwide.
  • U.S. commercial real estate is valued at $18-$22 trillion, supporting 15 million jobs and generating $2.3 trillion in GDP annually.
  • Eliminating the business deduction for property taxes would be the equivalent of raising business owners’ property tax bills by roughly 40 percent, causing employers to owe federal tax on money that they do not have.
  • This tax change could reverse the benefits of the 2017 Tax Cuts and Jobs Act (TCJA) and Section 199A, potentially raising effective tax rates to 1970s-era levels near 50%.
  • Additionally, the increased tax burdens could discourage new investment, deter housing development, and exacerbate the national housing crisis.
  • Given that U.S. businesses paid $1.1 trillion in state and local business-related taxes in 2023 (including nearly $400 billion in property taxes), the stakes are extremely high.

Treasury Halts Corporate Transparency Act Enforcement for U.S. Businesses

Posted on by Trey Jackson

This week, The U.S. Department of Treasury announced it will suspend enforcement of the Corporate Transparency Act (CTA) for U.S. citizens and domestic reporting companies. (CNBC, March 2)

Why It Matters

  • The agency will not impose penalties or fines tied to the CTA’s beneficial ownership reporting requirements, either under current deadlines or future rule changes. (BisNow, March 4)
  • Treasury plans to narrow the rule’s scope to apply only to foreign reporting companies, with a forthcoming rulemaking proposal.
  • Due to the far-reaching scope of the CTA, RER has long raised concerns about the regulatory burden and cost the CTA would impose on many commercial and residential real estate investment businesses. (Roundtable Weekly, Dec. 2024)
  • The decision marks a major shift in financial transparency regulation, easing compliance burdens on small businesses and other domestic entities.
  • The law, enacted in 2021, was aimed at curbing illicit financial activity by requiring companies to disclose their beneficial owners the Financial Crimes Enforcement Network (FinCEN).
  • The decision aligns with President Trump’s efforts to cut back on regulatory burdens, particularly for small businesses.

What’s Next

  • Treasury Secretary Scott Bessent called the move a “victory for common sense,” framing it as part of the administration’s broader deregulatory push to bolster economic growth.
  • “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy,” said Secretary Bessent. (Treasury Press Release, March 2)
  • Treasury will soon propose new rules to formally limit CTA enforcement to foreign reporting companies.

RER’s Real Estate Capital Advisory Committee (RECPAC) will continue to closely track developments related to the enforcement of the CTA.

Real Estate Industry Urges Congress to Preserve Deductibility of Business Property Taxes

Posted on by Trey Jackson

As discussions continue between the House, Senate, and Administration on how to move forward with a tax and fiscal package, The Real Estate Roundtable (RER) and sixteen other national real estate organizations wrote to members of the House Ways and Means and Senate Finance Committees urging them to oppose any proposal that would cap or eliminate the deductibility of state and local business property taxes.  (Letter)

A cap on property tax deductibility could have devastating consequences for commercial real estate owners, developers, and investors nationwide.

Why It Matters

  • Republican lawmakers intend to enact a major tax and fiscal package this year, and they are under pressure to identify additional revenue offsets to finance a growing list of priorities.  Ways and Means Committee Republican Members have scheduled all-day, closed-door meetings next week to discuss the details of their tax plan.
  • Some lawmakers have raised “Business SALT” and potential restrictions on the deductibility of state and local property and income taxes as a possible revenue offset for the tax bill (Roundtable Weekly, Feb. 28)
  • Eliminating the business deduction for property taxes would be the equivalent of raising business owners’ property tax bills by roughly 40 percent, causing employers to owe federal tax on money that they do not have.
  • “Business taxes are fundamentally different from state and local individual income taxes.  State and local business taxes are an unavoidable expense, an inescapable cost of doing business,” said Real Estate Roundtable President and CEO Jeffrey DeBoer.  (Roundtable Weekly, Feb. 21)
  • DeBoer’s comments were echoed this week in analyses from the Tax Foundation and former Congressional Budget Office Director Douglas Holtz-Eakin.  (Tax Foundation, March 3; American Action Forum, March 6).
  • “Firms deduct the costs of generating income—wages, rents, capital costs, etc.—and CSALT is the recognition of those costs. Fully deducting those taxes is … necessary to correctly tax firms. Capping CSALT is professional malpractice,” said Holtz-Eakin.

Effects on CRE and the Broader Economy

  • The ripple effects of this proposal would extend far beyond property owners to impact the broader economy and housing affordability nationwide.
  • U.S. commercial real estate is valued at $18-$22 trillion, supporting 15 million jobs and generating $2.3 trillion in GDP annually.
  • This tax change could reverse the benefits of the 2017 Tax Cuts and Jobs Act (TCJA) and Section 199A, potentially raising effective tax rates to 1970s-era levels near 50%.
  • “A cap on the deductibility of property taxes paid by businesses, “would cause self-inflicted injury to the U.S. economy, including unnecessary job losses, higher rents for families and individuals, and other inflationary pressures,” DeBoer said this week.  “It would lower commercial property values and create new stresses in the banking system. It is a recipe for a recession.”
  • Additionally, the increased tax burdens could discourage new investment, deter housing development, and exacerbate the national housing crisis.

Call to Action

  • RER urges members to amplify this message to their representatives in Congress.
  • Given that U.S. businesses paid $1.1 trillion in state and local business-related taxes in 2023 (including nearly $400 billion in property taxes), the stakes are extremely high.

Next Steps

  • House and Senate Republicans remain divided on several key issues as they work to prevent a March 14 government shutdown and agree on the parameters of a larger tax and fiscal reconciliation bill. (USA Today, March 7)

The impasse centers on whether to pursue one big bill or a two-bill strategy, the size of spending reductions, how to deal with the debt ceiling, and the budget baseline that will determine the need for offsetting tax increases.  The impasse could push resolution of the tax issues into the second half of the year.

Policymakers Sharpen Focus on Grid Reliability

Posted on by Trey Jackson

Recent legislative hearings and administrative initiatives have highlighted the critical need for a resilient and affordable electricity supply.​

The Big Picture

  • EPA Administrator Lee Zeldin’s initiative for “Powering the Great American Comeback,” and DOE Secretary Chris Wright’s 9-point plan for US “energy dominance,” outlined agency strategies emphasizing permitting reform, strengthening grid reliability, expanding U.S. energy production to fuel economic growth, and position the U.S. as a global leader in AI and advanced energy technologies.
  • As The Roundtable’s Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country” as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Jan. 25)

Why It Matters

  • Policymakers and industry leaders are debating how to balance investment in renewable energy, transmission infrastructure, and traditional baseload generation sources to ensure stable electricity supply. (E&E News, Feb. 26)
  • During this week’s joint address to Congress, President Trump emphasized the administration’s focus on reducing energy costs: “A major focus of our fight to defeat inflation is rapidly reducing the cost of energy … That’s why, on my first day in office, I declared a national energy emergency… It’s called drill, baby, drill.”
  • In a new report from The Center for Strategic & International Studies warns that while AI is digital, its biggest hurdle is physical infrastructure. The report explores using President Trump’s energy “emergency” declaration to fast-track permitting and urges a stronger DOE role in accelerating nuclear projects. (Axios, March 5)

Congressional Hearing

  • Industry experts argued that regulatory hurdles are slowing energy infrastructure projects, creating a gap between federal energy goals and grid capacity. (Latitude Media, March 5)

Clean Energy & Economic Impact

  • The American Clean Power Association (ACP) reports that while the Inflation Reduction Act (IRA) has boosted clean energy investment, uncertainty over efforts to cut tax credits raises concerns about long-term project financing.
  • In 2024, U.S. developers added 48 gigawatts of new utility-scale solar, storage, and wind capacity—a 33% increase from the previous year. (ACP Report, March 5)
  • The clean energy industry argues that wind and solar projects can be built faster than natural gas and nuclear, making them essential for stabilizing the grid. (E&E News, Feb.26)
  • 79% of operational clean power capacity is now located in Republican-held districts, with GOP districts also home to 77% of new clean energy additions last year. (PoliticoPro, March 5)
  • North America’s data center sector doubled its construction supply in 2024 to a record 6,350.1 megawatts (MW), underscoring the increasing power demands of AI-driven computing, according to CBRE’s latest North American Data Center Trend Report.  (ConnectCRE, March 4)

The Real Estate Roundtable will continue working with the administration to advance policies that streamline energy project approvals, strengthen grid resilience, ensuring a stable, reliable power supply to fuel economic growth and innovation.