The "One Big Beautiful Bill Act" (H.R.1), signed into law on July 4, 2025, introduces significant tax reforms with notable implications for the real estate sector. This legislation extends and modifies provisions from the 2017 Tax Cuts and Jobs Act, aiming to stimulate the housing market and investment landscape. However, it also includes measures that have sparked debate among stakeholders.CLA+2Investopedia+2US News Real Estate+2

🏡 Key Real Estate Provisions

1. Mortgage Insurance Deduction Reinstated

The bill restores the mortgage insurance deduction, allowing eligible homeowners to deduct premiums paid on mortgage insurance. This provision offers an average tax break of approximately $2,364, benefiting especially first-time and low-down-payment buyers.

2. Expansion of Low-Income Housing Tax Credit (LIHTC)

To address affordable housing shortages, the legislation expands the LIHTC program. This expansion is projected to facilitate the creation or preservation of over one million affordable rental units between 2026 and 2035, incentivizing developers to invest in low- and moderate-income housing.

3. Increase in SALT Deduction Cap

The State and Local Tax (SALT) deduction cap has been increased from $10,000 to $40,000 through 2030. This change is expected to stimulate housing markets in high-tax states like California and New York by enhancing the attractiveness of homeownership in these areas.

4. Permanent 100% Bonus Depreciation

The bill reinstates and makes permanent the 100% bonus depreciation for qualified property placed in service after January 19, 2025. This allows investors to deduct the full cost of short-lived assets, such as flooring and HVAC systems, in the first year, enhancing cash flow and investment returns.

5. Opportunity Zones Program Made Permanent

The Opportunity Zones program, designed to spur investment in economically distressed communities, has been made permanent. Key enhancements include a rolling five-year deferral for initial gains and the introduction of Qualified Rural Opportunity Funds, offering benefits like a 30% basis step-up and lower improvement thresholds.

6. Extension of Energy-Efficient Building Incentives

The legislation extends the §179D deduction for energy-efficient commercial buildings and the §45L credit for energy-efficient residential properties. These incentives encourage developers to incorporate energy-saving features into new constructions and renovations.

⚠️ Considerations for Stakeholders

• Homeowners: The reinstated mortgage insurance deduction and increased SALT cap may provide tax relief, particularly for those in high-tax states.

• Investors and Developers: Permanent bonus depreciation and expanded Opportunity Zones offer substantial tax advantages, promoting investment in both urban and rural areas.

• Affordable Housing Advocates: The expanded LIHTC program is a significant step toward addressing the affordable housing crisis, potentially leading to increased availability of low-income housing options.

📌 Disclaimer

This analysis is intended solely for informational purposes and does not express political opinions or endorsements. Our goal is to provide real estate professionals, clients, and industry partners with clear insights into how enacted legislation may impact the housing and real estate markets. For Legal or tax advice please consult with tax professionals and legal advisors to understand the specific implications for your  circumstances.