Just a few years ago, in 2011, there were approximately 11,261 private jets registered across the United States. Thanks to the recent 2017 Tax Cuts and Jobs Act and updated U.S. tax code, we could soon see many more high-end private jet buyers.
According to Business Insider, the new U.S. tax code now allows 100% bonus depreciation for private jet aircrafts and allows buyers to deduct 100% of the jet’s cost right away. These changes are projected to significantly boost demand for these aircrafts across the United States.
“This is a very generous depreciation offer and the market has been on the cusp of a turnaround for some time,” said Richard Aboulafia, vice president and aviation industry analyst at Teal Group. “Maybe this serves as one of the precipitating factors.”
Globally, the richest people already spend $23 billion a year on private aviation and the U.S. accounts for 49.7% of that market, with Europe in second at 20.8%. Thanks to these new tax breaks, that number could soon skyrocket.
“Although we are still in a recovering market, this milestone tax reform, complemented by positive economic data and macroeconomic indicators, such as GDP and corporate profits, highly favor new aircraft acquisition,” added Michael Amalfitano, Executive Jets CEO of Embraer.
Additionally, the National Business Aviation Association (NBAA) states that the new 100% bonus depreciation applies both to pre-owned and newly manufactured aircrafts, though it must be the buyer’s first use of a pre-owned jet for it to legitimately qualify.
Take a look at some of the most expensive private jets currently on the market:
- The Boeing Business Jet — 18-seater priced at $34.9 million.
- The Gulf Stream G550 — 19-seater priced at $33.7 million.
- Bombardier Global Express XRS — 17-seater listed at $18.9 million.
Jets with binding sales agreements attached to them on or before the cutoff date of September 27, 2017 will be subject to a 50$ bonus depreciation.