The commercial real estate wants its turn at a tax credit and is pushing a bill that would give incentives to those who invest now. Called the Community Recovery and Enhancement Act, the bill would provide short-term tax incentives to jumpstart reinvestment in commercial real estate.
The International Council of Shopping Centers says it would stabilize community banks as well as preventing additional foreclosures and job losses. Lenders still find it difficult to refinance and borrowers are faced with paying off loans that are greater than their current property values, the ICSC news release said.
To be eligible for a tax break, the act requires that at least 80 percent of newly invested capital be used to reduce the outstanding balance of the commercial loan, with the remainder going toward capital improvements.
Just like the housing market, commercial real estate assets plummeted in value during the recession and are just now on the way to recovery (some faster than others, ahem, CoStar.) But experts also say last year’s homebuyer’s tax credits hurt the housing market because it created a false boom during the first part of the year — then demand took a dive after the credit expired.
So, would a tax credit for commercial real estate have the same effect?
