Sponsored by Rep. Chuck Riley (D-Hillsboro), this proposed bill would cause 1031 Exchanges (tax deferred like-kind property exchanges) to become taxable events. 1031s have been very popular with investors for years, as they can increase their property investment portfolios by exchanging “up” and not having to pay taxes on the capital gains until they choose to sell the property. This law as a portion of the IRS code was enacted by Congress in 1918.
At first glance, an uneducated take on this COULD be that new taxes could stimulate Oregon’s economy, but that is overly simplistic. A deeper analysis of this by economists will show that Like-Kind Exchanges are integral to the health of the real estate market, and are one of the most fundamental components of real estate investment. Passage of HB2696 will cause further harm to our struggling real estate market and would likely cause an increase in Oregon’s already HIGH unemployment rate of nearly 10%.
There is a public hearing scheduled for 8am on Tuesday March 10 in Hearing Room A. Our team is vehemently opposed to this bill and are encouraging the Committee Chair Phil Barnhart and Rep. Chuck Riley to vote NO on this bill. If you’d like to contact them, the email addresses are: