2025 Trump Tax Proposals: Corporate Tax Cuts, Tariffs, and Their Impact on Real Estat

[Tyler Hall]

I have been digging into the 2025 Trump tax proposals, and the more I look at them, the more it seems we’re in for a complex market shift—especially for real estate. The plan to cut the corporate tax rate from 21% to roughly 18% certainly has echoes of past reforms. Back in 1986, similar tax cuts spurred a 12–15% boost in commercial real estate investments, and the 2017 overhaul led to a near 10% surge in capital expenditures in key markets. These historical trends suggest that lowering the tax burden can free up capital for reinvestment and fuel a fresh wave of property acquisitions and development projects.

But there’s more to the story than just tax cuts. There’s growing talk about imposing tariffs on imported construction materials like steel, aluminum, and lumber. Past trade measures show that such tariffs have raised construction costs by about 5–10% in affected regions. In practical terms, even if developers have more capital thanks to lower taxes, the increased costs for materials might force them to rethink project feasibility, adjust pricing strategies, or even delay or cancel projects altogether. In my view, these added expenses could very well negate some of the financial benefits expected from the tax cuts.

Then there’s the issue of municipal budgets. Lower tax revenues, when combined with higher construction costs, could compel local governments to tighten their belts. This might lead to cuts or delays in public infrastructure and services that many tertiary industries—like hospitality, professional services, and retail—rely on to thrive. It paints a picture of a market that might see uneven benefits across different regions.

Speaking of regions, here’s another point for discussion: urban centers are likely to fare better under these changes than rural or emerging secondary markets. Cities tend to have diversified revenue streams and robust infrastructure, which historically have helped them rebound faster from fiscal shocks. Smaller or less diversified areas, on the other hand, could struggle with the double hit of reduced tax income and rising costs.

 I believe that the extra burden from tariffs will probably dampen the positive effects of lower corporate taxes as a shot term trend, potentially leading to slower project initiations. And I suspect urban centers will be better insulated against these shocks than their rural counterparts. Have you seen similar trends in your markets? Or do you think there’s room for innovation that could counter these challenges? Let’s discuss—what’s your take on how these fiscal changes might reshape our real estate landscape?

thoughts?

-Tyler