Elections bring both promise and peril for business leaders, and commercial real estate is no exception. According to a mid-2024 survey conducted by PERE among US real estate executives, nearly 90% believe the 2024 election results will impact the real estate industry, and 75% anticipate direct effects on their businesses.
Focus remains on the policy direction of the reinstated Trump administration, particularly regarding tax legislation. The Tax Cuts and Jobs Act (TCJA) of 2017, a hallmark of Trump’s first term, is poised for expiration by the end of 2025. With Republicans controlling Capitol Hill, there’s a stronger potential for extensions, though this comes with inherent challenges. President Trump aims to renew and potentially expand the TCJA, along with introducing new tax-related proposals, all potentially impacting the financial performance of real estate industries not just locally, but globally in the near term.
As commercial real estate (CRE) leaders prepare for these changes, tax policy has come under intense scrutiny. According to Deloitte’s 2025 commercial real estate outlook, nearly 900 top global executives and their direct reports at CRE owner and investor organizations prioritized changes in tax policy as their third most significant macroeconomic concern for 2025, a marked increase from its former 14th position. Among US respondents, the concern rose from 11th to fifth place, second only to worries about rising interest rates.
CRE leaders’ focus is honing in on tax policies in 2025 due to several critical factors. First, Pillar Two’s 15% global minimum tax is being rolled out in numerous jurisdictions. Secondly, the outcomes of elections held by the end of 2024 in about 80 countries could ripple through fiscal policies worldwide. Lastly, the looming expiration of key US tax code provisions at the close of 2025 signals likely significant tax legislation activity in Congress this year.
These evolving tax concerns drive critical discussions in the commercial real estate sector, shaping strategies and preparations for any forthcoming legislative changes that could impact the industry both stateside and abroad.
For more insights, read the full article on Deloitte.
