The U.S. House of Representatives has passed the “One Big Beautiful Bill Act,” a comprehensive tax reform package that includes several significant provisions benefiting the real estate sector.
The National Association of REALTORS® (NAR) successfully advocated for key measures that support real estate professionals, homeowners, and investors.
key highlights:
- Qualified Business Income Deduction (QBI): The bill permanently increases the QBI deduction from 20% to 23%, providing substantial tax relief to over 90% of NAR members who are independent contractors or small business owners.
- State and Local Tax (SALT) Deduction: The SALT deduction cap is raised from $10,000 to $40,000 for households earning under $500,000, with both the income cap and deduction amount increasing by 1% annually over a decade.
- Mortgage Interest Deduction (MID): The legislation preserves and makes permanent the MID at its current level, maintaining a crucial benefit for homeowners.
- Section 1031 Like-Kind Exchanges: The bill protects Section 1031 exchanges, allowing investors to defer capital gains taxes when reinvesting in similar properties, a vital tool for property investment and economic development.
- Individual Tax Rates: Current individual tax rates are made permanent and indexed for inflation, aiding taxpayers and improving affordability for prospective homebuyers.
- Additional Provisions: The bill includes enhancements to the Low-Income Housing Tax Credit, estate tax certainty with a permanent exemption threshold set at $15 million (adjusted for inflation), renewed Opportunity Zone incentives, and the creation of tax-advantaged child investment accounts for expenses like first-time home purchases.
These measures aim to strengthen housing affordability, investment, and generational wealth. For a detailed overview of the bill’s provisions and their implications for the real estate industry, read the full article on REALTOR® Magazine.
In the latest episode of the Advocacy Scoop podcast, NAR advocacy leaders Shannon McGahn and Patrick Newton discuss the Senate’s approach to the new tax reform bill. They highlight key provisions impacting REALTORS® and homeowners, including:
- Making the mortgage interest deduction permanent
- Increasing the state and local tax (SALT) deduction cap
- Enhancing the qualified business income deduction for independent contractors
The episode also covers NAR’s ongoing advocacy efforts and insights from a recent member tax survey.
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