Proposed tax provision could give aircraft buyers a lift

For business owners and affluent individuals, owning a private jet is more than a mark of prestige—it’s the ultimate investment in convenience and time-savings. Rather than navigating the chaos of public airports and airline schedules, jet owners can access thousands of smaller airports across the country, zip between multiple locations in a single day and still be home to sleep in their own bed.

“I’ve had several clients refer to their aircraft as their personal time machines. They can accomplish in one day what used to take them a whole week,” said Matthew Bere, managing director of aviation for BOK Financial® Private Wealth.

Private aircraft sales saw a spike during the COVID pandemic and the low-interest rate environment that followed, and despite the inflation and rising rates of more recent years, demand remains relatively strong, said Bere, who is also a licensed commercial pilot. Now, as Congress deliberates significant policy reforms, would-be aircraft buyers could soon be gifted a massive tax write-off.

Jet buyers could benefit from proposed all-at-once tax deduction
On May 22, the House of Representatives narrowly passed President Trump’s “One Big Beautiful Bill Act,” a major fiscal and tax reform package with wide-ranging implications for taxpayers, businesses and investors. While the Senate has yet to review the legislation and the details are subject to change, the current bill contains a provision that could be of particular interest to aviation enthusiasts.

If the bill passes in its current form, it will reinstate 100% bonus depreciation for eligible property acquired and placed into service between January 19, 2025, and January 1, 2030. This would allow taxpayers to deduct 100% of the cost of a qualifying business asset in year one, rather than spreading out that deduction over the lifespan of the asset.

“For someone interested in buying a jet, whether new or used, this is a very big deal,” said Bere. “The all-at-once tax deduction could potentially reduce their taxable income by millions of dollars in a given year, saving them a huge amount of money in taxes.”

The last time 100% bonus appreciation took effect was with the Tax Cuts and Jobs Act of 2017, but the bonus aspect has been phasing out since 2023. If the Big Beautiful Bill does not pass, bonus depreciation would be only 40% for 2025 and 20% for 2026.

“If the bill does pass, I would expect it to spur a lot of activity in aircraft sales,” said Bere.

Planning ahead to maximize tax advantages
While buyers may be prompted to accelerate their purchase decisions, Bere said it’s also important to time transactions strategically.

For example, the 100% bonus depreciation (if passed) can only be taken for the tax year in which the aircraft was put into service. That may come later than the year the buyer placed the order and made a down payment.

“Aircraft manufacturers are still rebuilding their inventories after a few years of supply chain disruptions,” said Bere. “For those ordering new aircraft, it might be 12 to 24 months before they can make the delivery.”

That consideration may weigh heavily in financial decision-making, such as timing when to sell certain assets for gains that may be offset by the aircraft depreciation deduction.

Financing tips for flyers
Beyond taking advantage of tax law changes, Bere offered some key points of advice to help prospective buyers make the best financial decisions.

He mentioned that while some buyers may be able to buy in cash, it’s not always the best move. “By financing the aircraft instead, your business may be able save some dry powder [uncommitted capital] for other opportunities like expansion or acquisitions, and the yield on those investments may outweigh the interest paid on the aircraft loan.”

Financing can also help the buyer avoid liquidating assets to fund the aircraft purchase, which may disrupt their portfolio balance and long-term investment strategy.

“It’s also important to clearly define what you’re trying to accomplish by buying an aircraft,” Bere said. “You should know how often you plan to use it, where you’re likely to travel, and how many people you’ll need to carry, among other factors. Planning these things in advance can help avoid a costly mistake by buying a plane that’s not well-suited for the job.”

Bere also cautioned that the aircraft’s sticker price is only the beginning of the financial commitment.

“There’s insurance, fuel, routine maintenance, occasional repairs, hangar fees and pilot fees to account for,” he said. “Those additional costs can be substantial and should factor in to how much plane the customer can comfortably afford.”