New tax bill lets landlords deduct up to $250,000 per unit in year one

What does this do?

HR 8996 changes the tax code to allow landlords and real estate investors to deduct up to $150,000 per unit in the first year a new rental building is placed into service, instead of spreading deductions over many years. For properties that qualify as affordable housing under existing federal rules, the deduction rises to $250,000 per unit. The property must be newly constructed, contain at least two units, and be located in the United States.

Who does it affect?

The bill directly affects real estate developers, landlords, and investors who build new multi-unit rental properties. Renters could be indirectly affected if the incentive leads to more rental housing being built in their area.

Why does it matter?

Owners who stop using the property as rental housing within 10 years must repay some of the tax benefits, or within 15 years for affordable housing projects. The bill applies only to properties newly constructed and placed into service more than one year after it becomes law, leaving existing rental properties unaffected.

Where does it stand?