Tax considerations are becoming more central to CRE investment strategy
As CRE firms become more selective about where and how they deploy capital, tax considerations are becoming a more important part of the equation. Decisions about which markets and assets to invest in could benefit from considering not only potential returns, but also the tax implications that can shape them.
Tax strategy can be a more active source of real estate value creation and retention
For CRE owners and investors, 2027 may be the year when tax strategy moves from the back office to the investment committee. Our survey shows 32% of respondents expect tax strategy to play an even more central role in their investment decisions over the next 12 to 18 months. After several years of pressure from higher capital costs, uneven demand, and valuation uncertainty, the ability to translate tax policy, incentives, credits, and structuring choices into after-tax cash flow could give companies an edge.
The opportunity starts with timing. Owners that integrate tax analysis earlier in the deal cycle may identify opportunities for accelerated cost recovery, cost segregation, repair-versus-capitalization treatment, and basis planning before commercial terms are locked.
Incentives and credits should also be treated as factors for location selection and capital allocation. In the United States, 2027 tax planning should account for two shifts: Certain federal tax benefits for energy-efficient commercial buildings were closed to new qualifying activity after June 30, 2026, and a revised, permanent version of the Opportunity Zone program is scheduled to start on Jan. 1, 2027.11 Globally, owners may also consider comparing markets where policy is improving project economics. In the United Kingdom, for example, there are early discussions around a policy of nominating “AI Growth Zones” designed to address power and zoning regulation, though there is no specific tax implication yet.12
Execution can determine who captures value
The value that tax planning can provide depends on early involvement, reliable data, thorough documentation, and coordination across tax, finance, acquisitions, development, asset management, and legal. While nearly half of respondents involve tax during underwriting or investment committee review, only 26% do so at origination. Divergent tax regimes and policy uncertainty further impact planning (figure 6). In 2027, firms could consider embedding tax specialists earlier across acquisitions, development, capital projects, asset management, and divestments.
