Stimulus for Property Owners

Among the provisions of the recently-passed stimulus package benefiting real estate: $25 billion in rental assistance to states and clarification that business owners can deduct business expenses on their federal tax returns that were paid using a forgivable Paycheck Protection Program (PPP) loan.

The National Association of REALTORS® (NAR) and other industry groups argued that a federal eviction moratorium without rental assistance would lead to a crisis in which housing providers couldn’t cover their costs and tenants would fall further and further behind in payments.

“While REALTORS® worked to ensure thousands of American families would not go homeless, it was clear that broad, ongoing eviction moratoriums were jeopardizing the very housing opportunities we were trying to protect,” said NAR President Charlie Oppler, in a prepared statement.

“Rental assistance helps stabilize that housing and keep families in their homes, and we’re grateful that Congress could secure this and other critical relief measures in this legislation.”

The new stimulus:

Provides $25 billion through Sept. 30, 2022, for rental assistance.
Allocates funds to states based on population. No state will receive less than $200 million.
Allows landlords to apply for funds on behalf of tenants.
Includes payments for rent in arrears as well as utilities and other expenses related to housing.
Asks states to prioritize assistance for families who make less than 50% of the state’s median income (but no set percentage of funds distributed is required).
Extends the federal eviction moratorium through Jan. 31, 2021.

Rental assistance will be paid directly to housing providers and must be included in recipients’ income for federal tax purposes.

CA Small Business Grants Through Jan. 8 – Applications for the California Small Business COVID-19 Relief Grant Program opened Dec. 30 and can be submitted through Jan. 8. REALTORS® may apply provided they meet the eligibility criteria. Learn more here.

The program provides micro grants ranging from $5,000 to $25,000 to eligible small businesses (including independent contractors and sole proprietors) impacted by COVID-19 and the related health and safety restrictions. The grant amount will be based on the business’s annual revenue as documented in its most recent tax return:

For annual revenue of $1,000 to $100,000, the available grant amount is $5,000.
For annual revenue of greater than $100,000 up to $1,000,000, the available grant amount is $15,000.
For annual revenue of greater than $1,000,000 up to $2,500,000, the available grant amount is $25,000.

Payments and Other Provisions

Americans earning less than $75,000 per year and their dependents will receive $600 stimulus payments ($1,200 for married couples earning less than $150,000). But there are a number of additional provisions of importance to small business owners, including real estate professionals:

Unemployment

Extends the maximum number of weeks individuals may receive unemployment benefits from 39 weeks to 50 weeks.
Extends all unemployment assistance, including the Pandemic Unemployment Assistance program to March 14, 2021.
Makes PUA benefits retroactive to Dec. 1.
Phases out the PUA program by April 5, 2021.

Paycheck Protection Program

Appropriates $284 billion for PPP loans and $20 billion for Economic Injury Disaster Loan grants.
Allows certain hardest-hit small businesses to receive two PPP loans.
Sets a maximum loan amount a business can get to $10 million within 90 days.
Enables PPP borrowers who receive $150,000 or less in PPP loan money to submit a one-page forgiveness form online certifying their compliance with the program requirements.
Extends the deadline for using PPP loans to Sept. 30, 2021.
Allows businesses to use PPP funds to cover the cost of personal protective equipment (PPE) for employees.
Allows for deductibility of business expenses paid for with forgiven PPP loans.

Tax Extenders

As part of the spending package, Congress passed several tax extenders of importance to real estate:

The exclusion from income for mortgage debt forgiveness is extended for five years, but the maximum amount is reduced from $2 million to $750,000.
The energy-efficient commercial buildings deduction is extended permanently, its efficiency standards are updated, and the deduction rates are indexed for inflation.
The energy investment tax credit for solar and the residential energy efficient property tax credit are extended for two years.
The mortgage insurance premium deduction is extended for one year.
The energy-efficient homes credit is extended for one year.
The nonbusiness energy tax credit for qualified energy efficiency improvements is extended for one year.

Source: NAR

Among the provisions of the recently-passed stimulus package benefiting real estate: $25 billion in rental assistance to states and clarification that business owners can deduct business expenses on their federal tax returns that were paid using a forgivable Paycheck Protection Program (PPP) loan.

The National Association of REALTORS® (NAR) and other industry groups argued that a federal eviction moratorium without rental assistance would lead to a crisis in which housing providers couldn’t cover their costs and tenants would fall further and further behind in payments.

“While REALTORS® worked to ensure thousands of American families would not go homeless, it was clear that broad, ongoing eviction moratoriums were jeopardizing the very housing opportunities we were trying to protect,” said NAR President Charlie Oppler, in a prepared statement.

“Rental assistance helps stabilize that housing and keep families in their homes, and we’re grateful that Congress could secure this and other critical relief measures in this legislation.”

The new stimulus:

Provides $25 billion through Sept. 30, 2022, for rental assistance.

Allocates funds to states based on population. No state will receive less than $200 million.

Allows landlords to apply for funds on behalf of tenants.

Includes payments for rent in arrears as well as utilities and other expenses related to housing.

Asks states to prioritize assistance for families who make less than 50% of the state’s median income (but no set percentage of funds distributed is required).

Extends the federal eviction moratorium through Jan. 31, 2021.

Rental assistance will be paid directly to housing providers and must be included in recipients’ income for federal tax purposes.

For annual revenue of $1,000 to $100,000, the available grant amount is $5,000.

For annual revenue of greater than $100,000 up to $1,000,000, the available grant amount is $15,000.

For annual revenue of greater than $1,000,000 up to $2,500,000, the available grant amount is $25,000.

Payments and Other Provisions

Americans earning less than $75,000 per year and their dependents will receive $600 stimulus payments ($1,200 for married couples earning less than $150,000). But there are a number of additional provisions of importance to small business owners, including real estate professionals:

Unemployment

Extends the maximum number of weeks individuals may receive unemployment benefits from 39 weeks to 50 weeks.

Extends all unemployment assistance, including the Pandemic Unemployment Assistance program to March 14, 2021.

Makes PUA benefits retroactive to Dec. 1.

Phases out the PUA program by April 5, 2021.

Paycheck Protection Program

Appropriates $284 billion for PPP loans and $20 billion for Economic Injury Disaster Loan grants.

Allows certain hardest-hit small businesses to receive two PPP loans.

Sets a maximum loan amount a business can get to $10 million within 90 days.

Enables PPP borrowers who receive $150,000 or less in PPP loan money to submit a one-page forgiveness form online certifying their compliance with the program requirements.

Extends the deadline for using PPP loans to Sept. 30, 2021.

Allows businesses to use PPP funds to cover the cost of personal protective equipment (PPE) for employees.

Allows for deductibility of business expenses paid for with forgiven PPP loans.

Tax Extenders

As part of the spending package, Congress passed several tax extenders of importance to real estate:

The exclusion from income for mortgage debt forgiveness is extended for five years, but the maximum amount is reduced from $2 million to $750,000.

The energy-efficient commercial buildings deduction is extended permanently, its efficiency standards are updated, and the deduction rates are indexed for inflation.

The energy investment tax credit for solar and the residential energy efficient property tax credit are extended for two years.

The mortgage insurance premium deduction is extended for one year.

The energy-efficient homes credit is extended for one year.

The nonbusiness energy tax credit for qualified energy efficiency improvements is extended for one year.

Source: NAR