A battle to preserve local businesses in New York resulted in a victory recently. The New York City council and mayor were able to strike a deal aimed at reducing taxes on commercial real estate for the city's small businesses. This may make commercial real estate transactions involving leases even more appealing for the owners of small businesses in New York who are interested in finally getting a storefront or expanding to a bigger space.
After the deal was struck, small business owners said they were happy about the move. Reducing and reforming the area's commercial rent tax may help thousands of businesses to stay open at a time when business operation costs are generally high. In other words, it may help to end the rapid increase in the number of empty storefronts available for rent.
A city councilman said the deal is unique in that it is not one that necessarily benefits big banks, coffee shops or drugstores with a large number of locations. Instead, it targets commercial businesses and community organizations that are struggling. With the new bill, around 1,800 businesses will end up paying no taxes, thus saving around $1,300. Meanwhile, 900 businesses will see an $11,300 drop in their taxes. This money can then be reinvested in the business, which may mean hiring more workers.
The new tax bill may very well spark a rise in commercial real estate transactions involving leases, but navigating these types of transactions can be tricky for those who have never done it before. It can even be tricky for those who have been through the process, as no two situations are alike. An attorney can offer the guidance necessary to protect one's best interests when negotiating a commercial lease in New York.
Source: cbslocal.com, "Manhattan Business Owners Say Real Estate Tax Cut Will Be Lifeline", Nov. 29, 2017