New Tax Bill Sparks Surge in Private Jet Sales
The recent federal spending bill has ignited renewed interest in the private jet market, signalling a potential rebound in sales as affluent buyers eye advantageous tax benefits. The reinstatement of “bonus depreciation” allows business owners to immediately write off the complete purchase price of capital equipment, including private jets, creating a favorable environment for investment in aviation assets.
Impact of Bonus Depreciation on Jet Purchases
This legislative shift empowers individuals who typically acquire jets through their businesses or holding companies to deduct the entire cost of new or used aircraft in the first year of ownership, provided the planes are placed into service on or after January 19, 2025. This bonus depreciation revives a key provision from the 2017 tax cuts, replacing the declining depreciation percentages that were set to phase out progressively in subsequent years.
Barry Shevlin, CEO of FlyUSA, underscores the momentum, noting an influx of clients ready to make purchases following the bill’s passage. “We’ve had numerous owners waiting to upgrade, and the new tax structure is compelling them to act now,” he remarked. This uptick in purchasing activity is particularly timely for the private jet sector, which had experienced a slow growth period after the frenzied demand seen during the height of the COVID-19 pandemic.
Market Dynamics and Forecasts
The private jet market is at a turning point. Historical data shows a spike in the availability of pre-owned business jets, with listings surpassing an average of 1,800 per month compared to 1,744 in the first half of 2024. Moreover, the average time these jets remain on the market has extended to 418 days, up 32 days from the prior year. Many initial buyers, unfamiliar with the ongoing costs associated with ownership—maintenance and pilot fees—are now reconsidering their investments.
As Philip Rushton, founder of Aviatrade, points out, the market for specific aircraft models, such as the Gulfstream G650ER, has normalized following the pandemic spike, with inventory levels now reflecting typical availability.
Looking forward, it’s expected that significant purchasing activity might be delayed until later in the year, aligning with historical trends where sales often peak as companies finalize their tax strategies. Matt Walter, managing partner at Guardian Jet, emphasizes that while tax incentives won’t solely drive ultra-wealthy individuals to make purchases, they certainly influence timing decisions. “If you were considering an upgrade in the near future, you might accelerate that process now,” he stated.
Walter’s advice to clients is clear: act before September if you’re looking to buy. With anticipated demand surges in the fall, the competition for desirable aircraft—and inspection slots—will likely intensify significantly.
As the private jet industry navigates this new landscape, the implications of the legislative changes could reshape buying patterns significantly. The intersection of tax incentives, market realities, and evolving consumer preferences will be crucial determinants in the coming months.