The tax extenders bill approved by the Senate Finance Committee includes a reinstatement and extension of the 15-year leasehold improvement provision through 2013. According to World Property Channel, this is good news for commercial real estate owners as the legislation allows leasehold improvement construction costs to be more accurately aligned with the income generated by tenant leases. Owners will now wait to see if it passes the full US House and SenateĀ thisĀ fall.

The tax abatement aims to allow property owners the ability to recover the cost of building out a tenant space over 15 years instead of 39. This in turn will allow that capital to be properly reinvested with the hope of sparking job creation. The original 15-year provision was part of a $205 billion bipartisan package of tax extenders which originally included a provision allowing same-year expensing of cleanup costs which was taken out during Senate deliberations.

To read the full article from World Property Channel, click here.