Like-Kind Property
Like-kind property refers to real estate held for investment or business use that can be exchanged tax-deferred under Section 1031; nearly all real estate qualifies.
Definition
Like-kind property is the class of assets eligible for a 1031 exchange. The term is broad for real estate: almost any investment or business real property in the U.S. is like-kind to almost any other. You can exchange an apartment building for raw land, a retail strip for a DST interest, or a rental house for a warehouse.
Like-kind refers to the nature or character of the property, not its grade or quality. The key requirement is that both the relinquished and replacement properties are held for productive use in a trade or business or for investment; a primary residence or property held primarily for resale (dealer property) does not qualify.
Since the 2017 tax law, only real property qualifies; equipment, vehicles, and other personal property no longer do. Foreign real estate is not like-kind to U.S. real estate. This flexibility is what lets investors reposition across property types while deferring tax.
Key points
- Nearly all U.S. investment or business real estate qualifies
- Refers to the character of property, not its quality or type
- Must be held for business or investment, not personal use
- Since 2018, only real property qualifies, not personal property
Related terms
Jerry Baker founded Baker 1031 Investments to help exchange investors move from active property ownership into passive, institutional-quality real estate through DST, 721 exchange, mineral royalty, and Opportunity Zone strategies. He holds the FINRA Series 22 and Series 63 registrations and the Securities Industry Essentials (SIE) qualification. Read full bio →
Reviewed by the Aurora Securities, Inc. compliance team — Aurora Securities, Inc., member FINRA/SIPC. Last reviewed July 2026. Securities are offered through Aurora Securities, Inc.; Baker 1031 Investments, LLC is independent of Aurora Securities, Inc.
This glossary entry is educational and is not investment, tax, or legal advice, or an offer to sell or a solicitation to buy any security. Definitions are general and may not reflect your specific circumstances — consult your own CPA and attorney. Past performance does not guarantee future results.