New Jersey Real Estate Tax Update

Published: Nov 7, 2018
Topics: Tax
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EisnerAmper partner and co-chair of the NJ Real Estate practice, Jordan Amin, reviews why industrial and multi-family units are hot, as well as the tax-reform game-changer of Qualified Opportunity Zones, which offer potentially lucrative tax incentives for development in certain low-income areas.

Transcript

Jordan Amin: Hi, I'm Jordan Amin. I'm a tax partner at EisnerAmper and a co-chair of our New Jersey Real Estate Practice. If we look forward the next year or two in New Jersey, we're going to continue to see some of the same trends that we've been seeing in terms of real estate. The industrial market will continue to be hot as we move further into the e-commerce economy and we see more of the Amazon effect.

In addition to large industrial facilities, we're also going to see smaller ones closer to dense population as they try and get that last hour and last minute fulfillment of orders. If you look at the millennials, they want to live closer to, if not in, cities and urban areas, specifically those with transit hubs and downtowns. So, multifamily units will continue to be an area for growth as well.

One of the big things all of our clients want to talk about right now is opportunity zones. It's a piece of legislation that came out of the 2017 Tax Cuts and Jobs Act, and we're getting more guidance every day. We’re still waiting for some information, but essentially the government's looking to incentivize development in certain low-income areas that they've designated opportunity zones. There's potential opportunities for deferral of capital gains or potential elimination of capital gains down the road by investing in these areas. There's a lot of rules and regulations to it, but it's a very exciting area that a lot of our real estate clients are really interested in learning more about.

As we get into the end of the year, we typically spend a lot of time with our clients on tax planning. It’s one of my favorite times of the year because we get to meet with all of our clients, see what they're doing, and figure out how we can help them maximize their wealth by minimizing tax liability. So, if you think about this past year with the historic tax legislation, there are numerous opportunities to rethink how we've been doing things on a historic basis and give our clients the opportunity to do things differently, to really change their tax positions and hopefully save on some taxes.