Roanoke, IN | Hick - 11/28/2022 10:09
How much less land would sell if the taxes had to be paid?
None. I would say on average land that is destined to be sold would sell 10 years earlier than under current tax policy.
Without the 1031 or stepped up basis land wouldn’t change hands as quickly possibly driving prices higher.
I will take the opposite position. There would be less buyers if there is no incentive requiring folks to reinvest profits.
Someone offers me 3x for my ground for development. I take my profit, pay some taxes. Maybe I buy more land. Maybe I don't. It's highly unlikely that I just pass on the tremendous profit opportunity all together because I have to pay some tax. It is also highly unlikely that I overpay on my next investment by 20% because I have funds burning a hole in my pocket, thus leveling the buying playing field. |
Land inflation and 1031 exchanges
