Any effort by Congress to repeal like-kind property exchanges, would have negative impacts on the real estate industry, according to a survey, “Like-Kind Exchanges: Real Estate Market Perspectives 2015,” from the National Association of REALTORS® (NAR).
Like-kind exchanges under Internal Revenue Code Section 1031, allows individuals and businesses to defer capital gains taxes when one property is sold and the proceeds are reinvested in a similar property. Such exchanges benefit not just the economy but also spur job creation, according to the survey.
More highlights from the NAR survey:
- 63 percent of REALTORS® participated in a like-kind exchange transaction between 2011-14;
- 40 percent of those transactions would not have occurred if like-kind exchanges were not allowed;
- 96 percent of respondents indicated a decrease in real estate values if like-kind exchanges are repealed;
- 94 percent said a repeal would lead to decreased demand for core assets, business and services.