The presidential election remained too close to call at the time this post was written, leaving the future uncertain for the Boston real estate industry.
In the months leading up to the election, real estate players — perhaps sensing a Biden win or reacting to the president’s response to the pandemic — donated more money to the challenger than to Trump
If Biden wins, he might look to change some well-liked real estate practices. The former vice president has already set sights on dramatically reforming 1031 exchanges, a tax break beloved by the industry, in order to fund child care and elderly care. He plans to limit like-kind exchanges to people making less than $400,000 a year. He has also pledged not to raise taxes on households earning less than that amount — which means taxes on the wealthy are fair game.
Biden has also vowed to reform the Opportunity Zones program, created by the 2017 Tax Cut and Jobs Act, which provides capital gains tax breaks to developers who invest in “distressed” areas.
Should Trump clinch a second term, however, the industry could expect to continue reaping the rewards from those breaks, including those created by the 2017 tax overhaul.
The House Committee on Oversight and Reform called that legislation a “windfall” for real estate developers that would lead to $66.7 billion in gains over 10 years. The law doubled the estate tax exemption, exempted commercial real estate firms from a 30 percent limit on interest deducted by large businesses, and exempted real estate companies from limits on like-kind exchanges. The law is projected to add $1.9 trillion in debt over 11 years, starting in 2018.
Regardless of who wins, the next president will be responsible for leading the country through its worst health crisis in a century. Covid-19 has killed more than 230,000 Americans and infected more than 9 million.
The pandemic has also triggered a recession that has wiped out jobs and devastated city and state budgets. The real estate industry has been left reeling, with nearly every single sector — commercial, residential, multifamily, office, hospitality and more — taking big hits.
Some industry bigwigs cited the Trump administration’s handling of the pandemic as a reason to support Biden.