With one exception, real estate is not in Joe Biden’s immediate agenda. But within the next few months, the industry will have a fight on its hands — and a few things to cheer.
As Biden is sworn in today as the nation’s 46th president, his focus is on ending the pandemic. That’s good news for real estate, with the aforementioned exception: his proposal to continue the nationwide residential eviction moratorium until September.
Biden wants to end other measures, notably tax breaks that real estate executives have come to view as a birthright even though some have not been around that long — certainly not as long as the new president.
One favorite, the 1031 exchange, was born in 1954, a dozen years after Biden. The original provision let sellers avoid capital gains taxes by immediately spending the proceeds on another property purchase. But 1031 exchanges didn’t come into widespread use until court decisions in 1979 gave sellers time to reinvest and still get the tax break.
Since then they have become second nature in real estate. Pay taxes on reinvested gains? Unthinkable. As the late Leona Helmsley famously said, “We don’t pay taxes.