The Economic Stimulus Package Helps RE Investors

The new Economic Stimulus package may have some lucrative tax incentives that will benefit investment property owners. Under this bill there is a "bonus depreciation" schedule that allows property owners and leasehold tenants to write off up to half the qualified improvements that are completed in 2008.

Typically, landlords who make an improvement, must capitalize the improvement or write it off on a depreciation schedule over 39 or 27.5 years, but with the change, landlords and commercial tenants can now write off 50 percent of the cost for "qualified leasehold improvements" in the first year alone, as long as the improvements are completed by the end of this year. The rest is wrtten off over 15 years.

The article that I read was referencing how this stimulus package can help commercial property landlords and tenants, but I believe it can also assist the owners of mixed use and multi-family propery who would like to make capital improvements, such as a new roof or installing seperate heat, etc. The benefit to the property owner would be a significant write off at the end of the year resulting in huge tax savings.

Please stay tuned as I will add to this as I get more information.

Read the Washington Business Journal Article.