Tag: Tax Policy

House Ways and Means Advances GOP Tax Bill

Posted on by abigail_grenadier

The House Ways and Means Committee this week passed a comprehensive tax package that preserves critical features of current law while extending and improving real estate provisions supported by The Real Estate Roundtable. However, the legislation encountered a substantial setback Friday morning, when the House Budget Committee rejected the “One Big Beautiful Bill,” which combined the work of the Ways and Means and other House committees. (Axios, May 16)

“Taken as a whole, the tax proposals in the Chairman’s amendment will spur needed investment in our nation’s housing supply, strengthen urban and rural communities, and grow the broader economy to the benefit of all Americans,” said Roundtable President and CEO Jeffrey DeBoer.  (Read DeBoer’s full statement here)

State of Play

  • The House Budget Committee rejected the bill in a 16-21 vote after GOP leadership failed to secure sufficient support from several Republican holdouts. (Axios, May 16)
  • President Trump on Friday urged Republicans to fall in line and support the massive reconciliation package amid sparring among members on the Hill over various provisions. “Republicans MUST UNITE behind, ‘THE ONE, BIG BEAUTIFUL BILL!’” Trump posted on Truth Social.
  • House GOP leaders plan to continue private talks with the reluctant Republicans and the White House over the weekend in hopes of resurrecting the package next week. (Politico, May 16)

What’s In and Out for CRE

  • As currently drafted, the House legislation maintains the full deductibility of state and local business-related property taxes.
  • Carried interest, capital gains, like-kind exchanges, and general cost recovery periods for commercial real estate would remain unchanged.
  • Section 199A Deduction Boost: The legislation permanently increases the pass-through business income deduction from 20% to 23%, preserving eligibility for REIT dividends and effectively lowering the maximum tax rate on qualifying income to 28.49%.
  • 100% Bonus Depreciation: The Ways and Means Committee is proposing to reinstate 100% bonus depreciation for five years (2025–2030), incentivizing investments and upgrades in nonresidential properties.
  • Opportunity Zones: The legislation extends the Opportunity Zone tax incentives through 2033 and would set aside 33% of new OZ designations for rural areas.
  • Low-Income Housing Tax Credit: The legislation increases the allocation of low-income housing credits by 12.5% for four years and permanently reduces the threshold of private activity bond financing necessary for projects to otherwise qualify for credits.
  • Energy Tax Incentives: The Ways and Means legislation repeals or phases out tax incentives such as the section 48 tax credit for solar panel and other clean energy investments, the 45L tax credit for new home construction, and the section 30C tax credit for EV recharging stations.  (See more in Energy story below) 
  • Factory Expensing: Other tax changes would temporarily allow newly constructed manufacturing, agricultural and refining properties to qualify for 100% expensing.

Roundtable Advocacy

  • RER President and CEO Jeffrey DeBoer provided insights on these developments during a fireside chat at the ULI Spring Meeting in Denver this week. DeBoer discussed the current political climate, policy implications for commercial real estate, and outlined both emerging risks and opportunities shaping the industry’s future.

Housing News

  • The Ways and Means Committee’s provisions to expand the Low-Income Housing Tax Credit (LIHTC) align with components of the Affordable Housing Credit Improvement Act (AHCIA).  (Affordable Housing Finance, May 16) (RW, May 2)
  • The House Financial Services Subcommittee on Housing and Insurance held a hearing this week titled, “Expanding Choice and Increasing Supply: Housing Innovation in America,” focused on how modern construction technologies could increase moderate-income housing supply while identifying regulatory and financing barriers that limit broader adoption.
  • Lawmakers and witnesses explored alternative housing solutions such as manufactured housing, modular construction, and 3-D printed homes as ways to help close the housing supply gap.  (Watch Hearing, May 14)

Looking Ahead

  • House Ways and Means Chair Jason Smith (R-MO) expressed interest in passing a separate bipartisan tax package by the end of the year, at an appearance at the Economic Club of Washington, D.C. earlier this week. This package would include expiring tax provisions and healthcare-related items.
  • “I would love to work with Sen. Wyden, Chairman Crapo, ranking member Neal in trying to craft a bipartisan bill before the end of the year, because there’s a lot of tax provisions that I really care about that are expiring, or have expired, that are truly, truly bipartisan,” said Smith. (PoliticoPro, May 15)
  • Senate Finance Committee Chair Mike Crapo (R-ID) and fellow panel member Sen. Steve Daines (R-MT) are pushing to extend business tax cuts beyond the expiration set by Ways and Means, the latest change the Senate wants to make to the bill. (Reuters, May 16)

With the Budget Committee setback, the immediate future of the tax package is uncertain. But the provisions are certain to change further as the debate shifts to the Senate.

Roundtable Statement on the House Ways and Means Committee Reconciliation Mark-Up

Posted on by abigail_grenadier

Statement by Real Estate Roundtable President and CEO Jeffrey D. DeBoer

(WASHINGTON, D.C.) — “The Real Estate Roundtable supports Chairman Smith’s budget reconciliation substitute amendment. Taken as a whole, the tax proposals in the Chairman’s amendment will spur needed investment in our nation’s housing supply, strengthen urban and rural communities, and grow the broader economy to the benefit of all Americans.

Importantly, the amendment preserves the deductibility of business-related state and local property tax payments. It ensures that the long-term capital gains rate continues to reward entrepreneurial risk-taking by recognizing the value of sweat equity, business acumen, and other non-cash risks that taxpayers assume in order to build businesses and create jobs, and the amendment expands tax incentives for badly needed new housing construction. The amendment also recognizes the vital role that non-corporate businesses play in the nation’s economy.

When combined with spending reductions expected in the overall reconciliation bill, the pro-growth tax measures in the amendment can be expected to lessen the immediate impact on our nation’s budget deficit and begin to address our country’s long term structural, fiscal challenges.”

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GOP Races to Shape Reconciliation Bill

Posted on by abigail_grenadier

The House returned this week from recess to begin critical markups, racing against Speaker Mike Johnson’s Memorial Day goal. With just over three weeks until the Memorial Day target for President Donald Trump’s ambitious reconciliation bill, GOP lawmakers are navigating contentious policy debates on tax, Medicaid, energy incentives, and spending cuts.  (Politico, May 1)

State of Play

  • On Monday, Treasury Secretary Scott Bessent held another “Big Six” meeting with Speaker Mike Johnson (R-LA), Senate Majority Leader John Thune (R-SD), Senate Finance Chair Mike Crapo (R-ID), House Ways and Means Chair Jason Smith (R-MO), and National Economic Council Director Kevin Hassett to discuss the GOP’s tax provisions in the bill.
  • Although Speaker Johnson is adamant about his Memorial Day goal, Secretary Bessent indicated July 4 might be the more practical timeline.
  • After a White House meeting between President Trump, Speaker Johnson, House Majority Leader Steve Scalise (R-LA) and key committee chairs, the GOP leadership decided to delay markups next week in the House Energy and Commerce, Ways and Means and Agriculture committees. (Punchbowl News, May 2)
  • The House Financial Services Committee voted along party lines Wednesday to approve its portion of the reconciliation package, with Chair French Hill (R-AR) expecting savings to surpass the $1 billion in cuts mandated by the congressional budget resolution.

Tax Policy

  • Business SALT: The Roundtable (RER) is still focusing heavily on preserving the full deductibility of business-related property taxes, as lawmakers look for ways to pay for new tax provisions.
  • Through meetings, outreach, and aggressive advocacy efforts, RER and the real estate industry continue to urge lawmakers to reject a revenue proposal to limit the deductibility of state and local business-related property taxes as part of the tax bill.  The proposal could have a devastating impact on property values, rents, the health of the financial system, local communities, and consumer prices.
  • 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, reversing the benefits of the 2017 Tax Cuts and Jobs Act (TCJA) and raising effective tax rates on real estate to 1970s-era levels near 50%.  (RW, April 11) 
  • SALT: House Republicans left a high-stakes meeting with Speaker Mike Johnson on Wednesday without resolving their long-running internal dispute over the $10,000 SALT deduction cap.
  • Bonus Depreciation: President Trump said on Wednesday that Republicans are going to restore bonus deprecation for only four years. “Our big, beautiful bill, we may name it that actually, will include 100 percent expensing retroactive to January 20,” And we’re gonna make that expensing for a four-year-period at a full 100 percent.” (PoliticoPro, April 30)
  • The TCJA allowed businesses to fully deduct the costs of equipment and machinery, but bonus depreciation began phasing out in 2023, decreasing 20 percent annually and fully expiring at the end of 2025.

Carried Interest

  • The House Ways and Means Committee has privately indicated it’s not inclined to close the so-called carried interest loophole in the GOP’s sweeping tax package, though conversations are still ongoing. (PoliticoPro, April 29)
  • When asked about the proposal at a press conference, Speaker Johnson said that he didn’t want to get out front of the Ways and Means Committee but that “we’ve heard from interest groups around the country, and we want to do right by them.” (PoliticoPro, April 29)
  • Rep. Hill told Politico’s Morning Money last week that the policy “is a major source of economic growth, jobs, that impacts every community in the country — it’s not a loophole.” (Politico, May 1)
  • Since carried interest and its tax treatment first emerged as a controversial political issue in 2007, RER has consistently opposed legislative proposals to tax all carried interest at ordinary income rates.
  • RER’s Ryan McCormick told Bloomberg this week that taxing real estate investors’ “sweat equity” at higher income rates would hit projects in low-income and high-risk areas hardest. He added that, small real estate entrepreneurs take on significant risk when developing low-income areas, and these investors face similar risks as long-term equity holders and should be taxed at the 20 percent capital gains rate—a point he said has resonated with lawmakers. (Bloomberg, April 29)

IRA Energy Tax Credits

  • As the House Ways and Means Committee, prepares to markup its portion of the reconciliation bill in the coming weeks, House Ways and Means Chair Jason Smith (R-MO) has said the fate of the Inflation Reduction Act (IRA) is one of a few sticking points that the committee still has to figure out. (PoliticoPro, May 1)
  • Internal party divisions persist, highlighted by recent opposing letters from GOP lawmakers. Yesterday, Chair Smith received two letters from opposing House Republicans arguing their cases for full repeal of all energy tax credits under the IRA and preservation of the law.
  • The coalition of 26 House Republicans is urging GOP leaders to preserve electricity tax credits and protect the IRA’s transferability provision, which allows developers to finance clean energy projects by selling their tax credits. (PoliticoPro, May 2)
  • “Nothing is decided on the IRA,” said Rep. Vern Buchanan (R-FL), the number two Republican on Ways and Means. “The chips are on the table and a lot of that is going to happen next week.” (PoliticoPro, May 2)
  • In recent weeks, several Senate and House Republicans have written to leadership expressing their support for maintaining energy incentives that benefit both traditional and renewable energy sectors, and urging a more selective approach to scaling back the IRA’s tax provisions. (RW, April 25)

Challenges Ahead

  • The Energy and Commerce Committee faces internal GOP friction over Medicaid reductions, balancing fiscal hawks demanding significant cuts against moderates worried about political fallout. (Politico, May 1)
  • Majority Leader Thune (R-SD) highlighted the looming debt ceiling as a “hard deadline,” adding pressure to lawmakers juggling complex fiscal decisions.
  • Upcoming Treasury forecasts on the debt ceiling “X-date” could further adjust legislative schedules, as lawmakers await crucial financial projections.
  • Both House and Senate Republicans want to raise the debt limit in a budget reconciliation measure, something that President Trump has called for as well. (PoliticoPro, April 29)

White House Releases Budget

  • The White House on Friday released President Trump’s fiscal year 2026 budget request, outlining $163 billion in proposed reductions to federal spending that would start on October 1. (WSJ, May 2)
  • While presidential budgets outline an administration’s policy priorities, the figures rarely reflect the final appropriations determined by Congress. (Axios, May 2)
  • The FY2026 budget is expected to build on cuts already implemented by President Trump and adviser Elon Musk’s Department of Government Efficiency—most notably, reductions in the federal workforce. (AP News, May 2) The Trump proposal is already running into early resistance on Capitol Hill, including from Republicans. (Politico, May 2)
  • As reconciliation efforts progress, balancing the administration’s budgetary goals with legislative feasibility will be a challenge.

RER will continue to monitor developments closely as Congress advances a package that could have far-reaching implications for commercial real estate, business taxation, and economic growth.

Senate Budget Deal Advances with Trump Support, Tax Policy in Focus

Posted on by Trey Jackson

This week saw a major announcement from President Trump on sweeping new tariffs and movement in Congress as the Senate advances a compromise budget resolution, with big implications for tax and spending cuts.

Budget Resolution Moves Forward

  • During his tariff announcement, President Trump announced his “complete and total support” for a compromise budget resolution released on Wednesday. The statement came after Senate Budget Committee Chair Lindsey Graham (R-SC) unveiled the updated resolution, paving the way for a vote later this week. (Punchbowl News, April 3)

  • Trump’s public support for the budget resolution was the result of behind-the-scenes negotiations with Senate leadership to move the reconciliation process forward.
  • Senate Majority Leader John Thune (R-SD) and others in the administration brought the meeting together to alleviate the concerns of skeptical deficit hawks who believed the Senate’s budget resolution didn’t do enough to cut spending. (Punchbowl News, April 3)

  • After receiving assurances from Trump about his support for large-scale deficit reductions, Senators John Kennedy (R-LA) and Ron Johnson (R-WI) seemed to get on board with the compromise budget resolution. With key holdouts resolved, Majority Leader Thune appears to have the votes needed to get the resolution adopted. (CNN, April 2)

  • The budget resolution includes separate spending cut instructions for the House and Senate. While House committees are instructed to find $1.5 trillion in spending cuts, the Senate instructions only call for $4 billion. Senate GOP leaders indicate that they still plan to target $1.5 to $2 trillion in spending cuts, giving them greater flexibility but punting lingering issues down the road. (Politico, April 3)

  • A “vote-a-rama” on the budget resolution is expected to begin Friday evening, with final adoption anticipated early Saturday. (Politico, April 2)

Tax Policy Implications

  • The compromise budget resolution incorporates a “current policy baseline” approach that allows the 2017 tax cuts to be permanently extended without needing to offset roughly $4 trillion in costs.

  • The Senate version also authorizes $1.5 trillion in additional tax relief beyond making the tax cuts permanent, allowing tax writers to include other key provisions that business advocates are asking for.

  • The current policy baseline was another sticking point in the Senate resolution that has been punted to later in the process. Senate GOP leadership has opted to assert that the Budget Committee Chair has the authority to choose the baseline used in reconciliation. (Axios, April 1)

  • While this decision allows the compromise budget resolution to move forward, the parliamentarian could still rule on the issue later on. If the parliamentarian rules against the current policy baseline, it would dramatically change the budget resolution landscape and potentially force the GOP to enact a shorter-term extension of the 2017 tax cuts, rather than making them permanent.

  • The current policy baseline also has political implications. Responding to the Senate resolution, House Budget Committee Chair Jodey Arrington (R-TX) and other House tax writers expressed concern that the Senate budget resolution could add as much as $5.3 trillion to the debt. (Politico, April 2)

  • House Speaker Mike Johnson (R-LA) was more optimistic about the compromise budget resolution and the inclusion of the current policy baseline, saying, “We’re in the consensus-building business here… So we’ll have to socialize this with our members and see. Look, I think there’s a large number of House Republicans who expected that would be the final outcome… so it’s not a big surprise.” (Punchbowl News, April 3)

  • In a conversation with Punchbowl News this week, Chairman of the House Financial Services Committee French Hill (R-AR) emphasized that President Trump and House and Senate GOP leaders are united on the urgency to get the reconciliation package done.

  • Rep. Hill also strongly defended the current tax treatment of carried interest. “It’s not a loophole,” he said, calling it an “important component for long-term finance across the country” for many businesses, including commercial real estate, venture capital and energy. (Punchbowl News, April 3)

Looking Ahead
The coming weeks are a critical time for the administration and congressional leaders on key issues, including trade and tax policy. RER will continue to engage with policymakers to advocate for pro-growth policies that support investment, job creation and healthy real estate markets.

Roundtable Encourages Lawmakers to Extend and Enhance Opportunity Zone Incentives

Posted on by Trey Jackson

The Real Estate Roundtable (RER) wrote to the sponsors of the Opportunity Zone tax incentives encouraging them to extend and improve the tax benefits, which have successfully mobilized private investment in historically underserved communities. The letter to Senator Tim Scott (R-SC) and Representative Mike Kelly (R-PA) emphasizes the need for a long-term extension and targeted reforms to maximize OZs’ economic impact. (Letter)

CRE Impact

  • Since their enactment in 2017, OZs have spurred billions in private investment to revitalize distressed communities, finance affordable housing, and create jobs.
  • 72% of U.S. counties contain at least one OZ. By the end of 2022, the OZ tax incentives had helped mobilize $84.7 billion in investment for low-income areas. More recent estimates suggest OZs have attracted over $120 billion in capital. (Letter)
  • RER members have leveraged OZ funding to develop affordable housing, retail centers, office buildings, and life sciences facilities.

Roundtable Policy Recommendations

Under current law, the OZ tax benefits are phasing down and will expire altogether for new investments made after December 31, 2026. First and foremost, RER is advocating for a long-term extension of OZ tax benefits to spur continued investment and provide certainty to the private sector. Additional recommendations include: provide certainty to the private sector. Additional recommendations include:

  • Removing limitations on the type of capital eligible for investment in opportunity funds to allow a broader range of capital to flow into OZ investments;
  • Adding a new incentive for commercial-to-residential conversions to address housing shortages;
  • Establishing a rolling deferral period for new OZ investments to sustain long-term interest;
  • Improving the OZ working capital safe harbor to accommodate large-scale real estate developments;
  • Modifying the substantial improvement threshold to encourage redevelopment of vacant properties; and
  • Creating reporting and transparency requirements to track OZ impacts more effectively.

What’s Next

  • As Congress considers major tax legislation in 2025, long-term OZ reforms should be a priority to unlock additional private capital and sustain revitalization efforts in low-income communities.
  • Next week, HUD Secretary Scott Turner, an outspoken advocate for the OZ program will be a speaker at our Spring Roundtable Meeting. His recent tour of Philadelphia’s OZs showcased the transformative impact of public-private partnerships in revitalizing distressed areas. (Fox News, March 30)

RER will continue engaging with lawmakers to advance these recommendations and ensure Opportunity Zones remain a powerful tool for economic development.

Lawmakers Weigh Tax Priorities as Roundtable Emphasizes Need to Protect Deductibility of Property Taxes

Posted on by Trey Jackson

Congress returned to Capitol Hill this week facing a tight window to deliver on a range of policy priorities ahead of its April recess. As discussions intensify, Roundtable advocacy efforts continue to focus on avoiding harmful limitation on the deductibility of state and local business-related property taxes. (Punchbowl News, March 28)

Tax Talks

  • Congressional Republicans are navigating a range of considerations amid pressure from the White House to enact its tax agenda and from conservatives mindful of the deficit. (WSJ, March 26)
  • If Senate Republicans succeed in using the baseline strategy, it would significantly alter the final instructions for the House and Senate tax committees.
  • Under this approach, extending or making permanent many provisions from the 2017 tax cuts would effectively be cost-free. However, GOP deficit hawks may still need offsets for other elements of the tax package.
  • “Business SALT” and potential restrictions on the deductibility of state and local property taxes as a possible revenue offset for the tax bill. (WSJ, March 25)
  • State and local property taxes represent 40 percent of the operating costs of U.S. commercial real estate, a greater expense than utilities, maintenance and insurance costs combined. 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%. (Roundtable Weekly, Feb. 28; March 14) 
  • RER continues to lead advocacy efforts surrounding business SALT. RER members and staff are actively engaging with Congressional leaders on Capitol Hill, and educating lawmakers on the potentially devastating impacts of the proposals under consideration.
  • Earlier this month, 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 14) (BisNow, March 13)
  • RER members are proactively contacting congressional offices, reinforcing opposition to any legislation that would restrict or eliminate deductions for state and local business property taxes.
  • All RER members are strongly encouraged to amplify this message to their representatives in Congress. Read more here.

State of Play – Budget

  • Congressional Republicans are grappling with how to pay for President Donald Trump’s multi-trillion-dollar tax-cut and immigration reform agenda. (Reuters, March 27)
  • With GOP lawmakers eager to finalize a budget framework for the planned megabill, House Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD) are signaling that they will move forward on the fiscal blueprint without first resolving major disputes over the offsets needed to extend Trump’ s 2017 Tax Cuts and Jobs Act (TCJA). (Politico, March 26)
  • Meanwhile, the Congressional Budget Office (CBO) has projected that the U.S. government may reach its statutory debt ceiling by August or September unless Congress and the president agree to raise or suspend the borrowing limit.
  • Despite ongoing disagreements, an area of consensus has emerged: Speaker Johnson and Leader Thune are aligning around including a debt limit increase in the budget package—a move Senate Republicans had previously resisted. (Politico, March 26)
  • Failure to act could lead to a default on debt, risking economic stability, market volatility and lower property values. (AP, March 26)

Both chambers are targeting the week of April 7 to finalize the budget resolution, which would enable the reconciliation process needed to advance their legislative agenda in the months ahead.

Real Estate Industry Urges Congress to Preserve Carried Interest

Posted on by Trey Jackson

As tax negotiations continue this week on Capitol Hill, a coalition of 17 national real estate organizations submitted a unified message to congressional leadership urging preservation of current law on carried interest. (Letter)

Why It Matters

  • The coalition letter, led by the National Multifamily Housing Council and joined by The Real Estate Roundtable (RER) and others, highlighted that taxing all carried interest as ordinary income would raise taxes on 2.2 million real estate partnerships and nearly 9.7 million partners, potentially stalling new housing, infrastructure, and redevelopment projects.
  • Since carried interest and its tax treatment first emerged as a controversial political issue in 2007, RER has consistently opposed legislative proposals to tax all carried interest at ordinary income rates. (Axios, March 24 | NYT, March 8)
  • Research cited in the letter demonstrates that carried interest legislation would lower wages, reduce property values, and undermine economic growth. (Letter)

What’s At Stake

  • “Taxing carried interest at ordinary income rates would discourage the risk taking that drives job creation and economic growth. It would reduce economic mobility by increasing the tax burden on cash-poor entrepreneurs who want to retain an ownership interest in their business. It would have profound unintended consequences for housing affordability and main streets all across our country,” said Jeffrey DeBoer, President and CEO of The Real Estate Roundtable. Roundtable Weekly, Feb. 21)
  • The coalition emphasized that changing the tax treatment would particularly impact small and mid-sized real estate entrepreneurs who contribute sweat equity rather than large capital contributions to their projects.
  • The letter notes that the tax code ”has never, and should never, limit the reward for risk-taking to taxpayers who have cash to invest.”
  • Retroactive application of new tax policies on longstanding partnership agreements could harm small businesses, stifle entrepreneurs and sweat equity, and threaten future improvements and infrastructure in neglected areas.
  • Under the headline “Carried Interest Fight Gets Real,” media outlet Politico wrote that the real estate industry was “laying down a marker as lawmakers begin working to pass a deficit-conscious extension of the 2017 tax cuts.” (Politico, March 27)
  • The signatories of the letter included: National Multifamily Housing Council; American Hotel and Lodging Association; American Resort Development Association; American Seniors Housing Association; CCIM Institute; Council for Affordable and Rural Housing; ICSC Institute of Real Estate Management; Latino Hotel Association; Manufactured Housing Institute; Mortgage Bankers Association; NAIOP, the Commercial Real Estate Development Association; National Apartment Association; National Association of Black Hotel Owners, Operators, and Developers; National Association of Home Builders; NATIONAL ASSOCIATION OF REALTORS®

RER urges lawmakers to retain current law and avoid policies that would disincentivize investment, threaten housing affordability, and penalize job-creating entrepreneurs.

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.

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.

Major Tax and Fiscal Package Gains Momentum as House Passes Budget Resolution

Posted on by Trey Jackson

House Republicans’ effort to pass a massive tax and fiscal package received a jolt of momentum this week after a cliffhanger vote on the House floor Tuesday night. Passed by a narrow vote of 217-215, the House resolution would authorize $4.5 trillion in tax cuts, provided congressional committees can identify $2 trillion in spending reductions. 

House Budget Proposal

  • Under the deal negotiated with fiscal conservatives in the House, if congressional committees cannot agree on $2 trillion in savings, the size of the authorized tax cut will automatically adjust downwards.  If they can agree on more than $2 trillion in savings, the size of the authorized tax cuts would adjust higher. (House Committee Report, Feb. 18)
  • The House resolution also includes a controversial $4 trillion increase in the national borrowing limit, along with allocations of up to $200 billion for border security and $100 billion for defense funding. (Roll Call, Feb. 25; AP, Feb. 25))
  • Shortly before the vote, The Roundtable joined a broad business coalition urging Congress to pass the House budget resolution to prevent a looming tax hike on pass-through businesses.  (Letter, Feb. 24)

Next Steps

  • Both the House and Senate chambers must now align on a budget resolution before moving forward with a reconciliation bill detailing the spending cuts, tax reductions, and other measures.
  • Senate Republicans have expressed reservations about the House’s approach, particularly concerning the scale of spending cuts and the structure of tax extensions.
  • Senate leaders have already signaled they will push for changes to ensure the 2017 tax cuts become permanent, as the House plan may lack the fiscal room to do so while also accommodating President Trump’s proposed new tax breaks.
  • Senate Majority Leader John Thune emphasized the complexity of the task, stating, “It’s complicated. It’s hard. Nothing about this is going to be easy.” (The Hill, Feb. 27)

View from The White House

  • For weeks, the president has endorsed the House plan as the best way to achieve his top legislative priorities in one move, yet he has also signaled openness to the Senate’s alternative or a compromise blending both approaches.
  • “So the House has a bill and the Senate has a bill, and I’m looking at them both, and I’ll make decisions,” President Trump said at the White House on Tuesday. “I know the Senate’s doing very well, and the House is doing very well, but each one of them has things that I like, so we’ll see if we can come together.”

Revenue Offsets and Business SALT

  • Some lawmakers have raised “Business SALT” and potential restrictions on the deductibility of state and local property taxes as a possible revenue offset for the tax bill. 
  • Eliminating the business deduction for property taxes would be the equivalent of raising property tax bills on commercial real estate by roughly 40 percent. 
  • “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,” observed Real Estate Roundtable President and CEO Jeffrey DeBoer last week.  (Roundtable Weekly, Feb. 21)
  • “Employers would owe federal tax on money that they do not have.  It would lead to insolvencies and foreclosures. It would cause self-inflicted injury to the U.S. economy, including unnecessary job losses, higher rents for families and individuals, and other inflationary pressures.  It is a recipe for a recession,” said DeBoer.
  • It remains an open question whether the House and Senate will use a “current policy” budget baseline that would not count the extension of the 2017 tax cuts as a revenue loss.  A current policy baseline could significantly reduce the pressure to identify spending reductions and revenue offsets. (PoliticoPro, Feb. 28)

Averting Government Shutdown

  • In addition to the tax and fiscal package, congressional leaders are under pressure to reach an agreement on current-year federal spending before a government shutdown on March 14.  A short-term stopgap bill will likely be necessary. (Axios, Feb. 27, CBS, Feb. 27)

Looking Ahead

The House budget resolution directs House committees to report their spending reductions and tax changes to the House Budget Committee no later than March 27, 2025.