The U.S. House of Representatives has officially passed the One Big Beautiful Bill Act, delivering a significant legislative win for real estate professionals and property owners nationwide. Thanks to the tireless advocacy of the National Association of REALTORS® (NAR), this landmark legislation secures tax benefits that support the real estate economy and expands access to homeownership for American families.
Among the most notable victories are five core NAR-backed provisions, including:
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Qualified Business Income Deduction (Section 199A)
- The bill permanently increases the QBI deduction from 20% to 23%.
- This deduction benefits more than 90% of NAR members, who are classified as independent contractors or small business owners.
- 83% of voters said they supported the 20% tax deduction for independent contractors and small businesses making less than $400,000 a year, according to NAR’s national poll.
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State and Local Tax Deduction (SALT)
- The SALT deduction cap is quadrupled from $10,000 to $40,000 for households earning under $500,000. However, the bill does not eliminate the marriage penalty. Thus, whether taxpayers are single filers or married couples filing a joint return, they can deduct a maximum of $40,000 in state and local taxes. The income cap and deduction both grow 1% every year over a 10-year window.
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Individual Tax Rates
- Current individual tax rates, lowered as part of the TCJA, are made permanent and indexed for inflation, aiding taxpayers and improving affordability for prospective homebuyers.
- 86% of voters support the lowered income tax rates for individuals and married couples, according to NAR’s national poll.
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Mortgage Interest Deduction (MID)
- The draft preserves and makes permanent the MID at its current level, maintaining a key tax benefit for homeowners and supporting housing market stability.
- There had been concern MID might be reduced or eliminated as a budget offset
- 91% of voters support maintaining tax incentives such as the mortgage interest deduction for homeowners, according to the NAR poll.
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Business SALT and 1031 Like-Kind Exchanges
- The draft bill protects Section 1031 like-kind exchanges, which are often erroneously regarded as a tax loophole.
- It also includes no changes for most businesses deducting state and local taxes (sometimes referred to as “Business SALT”).
- While the bill does provide limits in state-level business SALT workarounds for certain high-income professionals (e.g., law firms, hedge funds, consulting businesses, and other services), the provisions do not appear to impact real estate professionals.
Additional Positive Tax Provisions for Real Estate Economy
- Low-Income Housing Tax Credit (LIHTC)
- Key provisions from the LIHTC Improvement Act will be included to support affordable housing development.
- Child Tax Credit Increased to $2,500 (2025–2028)
- Temporarily raises the child tax credit through 2028 and then indexes it for inflation starting in 2029.
- The child tax credit supports families and could help with housing affordability.
- Creation of Tax-Advantaged Child Investment Accounts
- Can be used for qualified expenses of the beneficiary such as first-time home purchases.
- Permanent Estate and Gift Tax Threshold Set at $15 Million (Inflation-Adjusted)
- Prevents a significant drop in exemption levels and supports generational wealth transfer, aligning with NAR priorities.
- No Top Tax-Rate Increase
- The proposed 39.6% top rate was removed from the bill.
- Restoration of “Big 3” Business Tax Provisions
- Full expensing of research and development (R&D)
- Bonus depreciation
- Fixes to interest expense deduction limits
- Immediate Expensing for Certain Industrial Structures
- Applies to structures used in manufacturing, refining, agriculture and related industries.
- No Change to Carried Interest Treatment
- Opportunity Zones
- Renewed with revised incentives to encourage targeted investment, including in rural areas.
- 80% of voters expressed support for tax incentives for investors to encourage economic growth and development in underserved and poorer communities, according to NAR’s recent national poll.
NAR’s Chief Advocacy Officer Shannon McGahn praised the bill, saying it “supports hardworking families and strengthens the real estate economy,” while reaffirming that NAR will continue to fight for REALTORS® as the bill moves to the Senate.
Recent polling confirms the public is on board. According to a national NAR-commissioned survey, 86% of voters support lower tax rates, 83% back deductions for small businesses, and 80% favor incentives for community investment.
As this bill heads to the Senate, one thing is clear—real estate is at the heart of the American Dream, and this legislation brings that dream closer for millions.
