The recent tax overhaul championed by President Donald Trump is being credited with helping the business aircraft manufacturing industry emerge from a decade-long slump.
The new tax law allows 100 percent bonus depreciation for new and preowned aircraft and lowers corporate taxes and effective pass-through rates. The changes are helping the business aircraft industry “turn the corner” in 2018, according to the National Aircraft Resale Association, which tracks prices of used jets.
“Business aircraft sales have been down so long it will take us a while to relearn how to navigate an up market,” said NARA chairman Brian Proctor. “But this should be a better ride than we have had in a long time.”
NARA credits the turnaround to the 2017 Tax Cuts and Jobs Act, which provides for 100 percent bonus depreciation, allowing taxpayers immediate deduction of the cost of a new or used business aircraft acquired and placed in service by January 1, 2027.
“While political and economic developments around the world can influence the market, now is a great time to buy an aircraft before prices increase,” Proctor said.
He notes that used aircraft in excellent condition are selling at a faster pace than in years past. Higher prices for used jets in turn have an impact on manufacturers’ ability to sell new jets. Meanwhile, interest among buyers is on the rise for jets just hitting the market, like the new HA-420 HondaJet, Pilatus PC-24, Cirrus Vision Jet and Gulfstream G500.
Proctor cautions, however, that new and used aircraft sales under the new tax law still require buyers to seek the best tax and legal advice before making a purchase.
