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The Real Deal Miami

Poor tax laws hinder real estate: NAR

September 01, 2010 01:30PM

NAR’s Bill Armstrong

People in the commercial real estate sector should be focused on carried interest rates — a share of the profits of a partnership that is paid to the manager of the partnership as an incentive to maximize performance of the investment fund — and opening credit lines, according to Bill Armstrong, treasurer-elect of the National Association of Realtors. “How carried interest is taxed affects how attractive commercial real estate is to buyers,” Armstrong said in a podcast moderated by Jim Helsel, NAR’s outgoing treasurer. The House of Representatives recently passed a proposal to tax carried interest at the regular income tax rate, instead of at its present capital gains tax rate, which is “not a good move,” Armstrong said. “We need to be encouraging investment in commercial real estate right now, not putting poor tax laws in place that would hinder it.” Currently, credit unions are only able to loan up to 12.25 percent of their assets, which Armstrong says is an “arbitrary cap.” He proposes that the credit union lending cap should be raised to 25 percent, allowing them to lend up to $10 billion in additional business loans, and which will create 108,000 jobs, he added. [NAR]