Anytime there’s a change in administrations, it can lead to a number of policy and tax changes that have material impacts on landlords and investors. No matter what the changes, it’s important, under Biden, for landlords to understand what shifts might be coming so that they’re able to take advantage of beneficial changes and prepare for less favorable ones.
With that in mind, here are some shifts that landlords should anticipate now that President Biden is in office.
Eviction Moratorium and Renters Assistance
One of the first acts as President, Biden put on landlords was to extend the federal eviction moratorium through March 31, 2021. However, in extending the moratorium on evictions, the President acknowledged the need to couple this with support,noting “if we don’t act now, there will be a wave of evictions and foreclosures in the coming months as the pandemic rages on.”
To help address this issue, Biden’s stimulus package, which is currently before Congress, includes $30 billion in rental and utility assistance. According to the President, the rental assistance is intended to “be a bridge to economic recovery for countless mom and pop landlords.”
Support for Low and Middle-Income Homeowners and Renters
The current administration is also committed to policies that address the affordable housing crisis that many Americans face. Much like the Obama administration, it’s likely that Biden’s administration will push Fannie Mae and Freddie Mac to move forward with affordable-housing goals.
Beyond that, Danielle Hale, chief economist at Realtor.com, notes that “Biden has a really ambitious agenda that will try to create opportunities for more low- and middle-income Americans to become homeowners or afford rental housing.” One notable component of that plan is incentives to encourage new construction with the clear goal of building 300,000 new units per year to keep up with demand.
Tax Shifts
Additionally, there are a number of proposed tax changes that could impact landlords and real estate investors. Here are a few to be aware of:
- Biden has proposed eliminating the step-up basis for inherited property. This would mean that property-owners would pay capital gains taxes on the current value of a property, as opposed to paying capital gains taxes on the value of the property when purchased.
- The Biden Administration has also proposed a one-time tax credit for first-time homebuyers up to $15,000. Notably, this credit would go to buyers at settlement and could make it possible for more people to come up with the money to buy a house, something that could potentially impact rental markets.
- Biden’s plan also includes a proposal to raise the corporate income tax from 21% to 28%. However, this would only apply to corporations and won’t affect LLCs that are partnerships or sole proprietorships.
- The plan also includes a proposal to raise the low-income housing tax credit. For landlords that invest in low-income neighborhoods, this could mean qualifying for a tax credit.
Conclusion
A new administration means shifts in legislative and tax policies. While some shifts are beneficial, others could mean challenges for landlords. The best thing landlords can do is to stay informed about changes that are ahead so they’re prepared to respond to and take advantage of any shifts.
For more resources or to talk with a local attorney, visit ezLandlordForms. Their bank of resources and team of experts make it easy for landlords to stay informed and to seamlessly adjust to any changes that come.
Thank you for the information.
first of all its not fair to landlords who are waiting for rent to pay there mortgage. there are jobs out there people need to wear masks . the tenants just want unemployment checks they are sitting at home doing nothing but drinking smoking pot.
I’m a landlord I have 3 rentals I have not collected rent on of the rentals since last march and one since August I still have to pay taxes maintenance water and sewage bills , I like my tenants I don’t have the heart to kick them out they haven’t been working for months eating from food banks hardly paying their utilities we all need help , HELP!
None of the Biden Administration proposals help Investment Property owners who have to manage low income renters and their abuse of the physical property and monthly payment delinquencies.
I feel your pain! All rights are for the tenant!
As the owner of one rental property I see such a wide discrepancy between rights for tenants and rights for landlords. I particularly got a tenant who lied about her employment on application, was given access, then confessed she was not working and has been in my house not paying rent for 5 months using Lone Star Legal Aid and COVID to keep from paying me a dime. What is fair when she filed bankruptcy leaving myself and creditors no recourse? We have a second hearing coming up to argue the merits of my filing eviction to get possession and she has free legal representation and I’m in no financial condition to hire an attorney.
Virginia,
I own three rentals. I learned the hard way that you MUST do the background checks, bank statements, credit check, and call for job verification before giving them their keys.
Good luck!!!