There have been many opinions, conspiracies, fictions and confusion by landlords over the new Tax Bill
and how it will effect you in 2018 and moving forward. So what exactly do you need to know about
these changes and how they will effect you and your investment?
The good news is that this Bill will actually help most landlords for the foreseeable future, atleast
through 2022 and beyond.(2)
Mortgage Interest, Property Taxes, Management Fee’s, Realtor Fee’s, Repairs and Maintenance, etc…
would still be deductible. On top of that, the changes would allow real estate investors to take
advantage of a new break that provides a 20 percent deduction on taxable income for pass-through
companies. A pass-through is a special type of corporate structure, popular among small business
owners. These firms avoid the double taxation of paying corporate and individual taxes. Instead, taxes
are applied solely at the individual level. Sole Proprietors and LLC’s fall into this category.(1)(2)
Along with this, a reduction in benefits for homeowners will cause more demand for rentals. In short,
people will find it more appealing to rent than buy. Couple this with the current shortage in housing,
especially in the Raleigh area due to growth, this should yield increased rental rates for the foreseeable
Higher rental rates coupled with increased tax benefits are, at least in the early phases, proving to be a
win win for the property investor. Fears that this bill would be detrimental are proving to be untrue.
Your tax attorney and/or CPA is still recommended for consultation and complete explanation of
benefits, but our hope is that this summary will help ease concerns about the short term viability of
investing in the real estate market as a landlord.
For more information see:
(1) https://www.forbes.com/sites/redfin/2017/12/20/landlords-just- got-a- big-tax-
(2) https://www.nolo.com/legal-encyclopedia/how- the-republican- tax-plan- affects-landlords.html