Business-Related Property Taxes

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

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. 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.

Position
  • Eliminating the business deduction for property taxes would be the equivalent of raising property tax bills on commercial real estate by roughly 40 percent.

 

  • 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%.

 

  • 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.

 

MORE ISSUES
MORE ISSUES
Business-Related Property Taxes
Capital Gains
Like-Kind Exchanges (LKEs)
Partnerships & Pass-Through Taxation
Carried Interest
Step-Up in Basis
Opportunity Zones (OZs)
Unrealized Gains ("Billionaire Tax")