Why 2021 may be the best time to sell!!

Last year in 2020 and even now well into 2021, the COVID pandemic has many New York City property owners feeling like a deer in headlights: Should I push forward? Take a step back?  Or should I just freeze and brace for impact from the worst disaster to strike the world in living memory?

While little is certain in these uncertain times, for New York’s multifamily owners considering their future, the following 2 forces can drastically impact value:

1.    NYC Rising Property Taxes

New York will never move forward unless its real estate industry moves forward. Next to finance and, increasingly, big tech, the industry is the biggest driver of the state economy and its 12-month enforced hiatus has cost the state $1.6 billion in lost tax revenue.

The state can’t just print money to make up that shortfall, so it is doing one of the only things that is certain in life: taxing.  From hikes in property taxes to capital gains, personal income to corporate tax, the state is creating a clear roadmap to recouping what’s been lost.   Property taxes will definitely be going up for the next few years…

2.    Biden’s Tax Overhaul (1031 Exchanges and Capital Gains)

At the Federal level, there is chatter that the new Biden Administration is looking to abolish 1031 tax exchanges and increase capital gains.  That change will drastically remove a big part of the market as tax exchange buyers are a huge driver of value in the NYC Multifamily market.

 As all this is currently speculative, 2021 might be the best year to maximize value and complete a tax-free exchange (or pay a lower capital gain tax). 

To maximize value of your assets in the current environment, it pays to consult an expert who is well informed about a market where what you know is just as important as who. We have completed several deals throughout the COVID pandemic that demonstrate not just the resiliency of the New York multifamily market, but also the underlying value that can produce outsize results and execution.  Please reach out to me or members of my team if you’d like to confidentially discuss the sale of your asset.