Key Real Estate Wins in The Tax Reform Package

The U.S. House of Representatives passed a long-anticipated tax reform package, the One Big Beautiful Bill Act, that included several major victories for the real estate industry, according to members of the National Association of REALTORS®. 

The bill permanently increases the qualified business income deduction from 20% to 23%, providing meaningful tax relief to the more than 90% of NAR members who are independent contractors or small business owners. It also quadruples the state and local tax deduction cap from $10,000 to $40,000 for households earning under $500,000, though the marriage penalty remains in place. The bill makes the current individual tax rates permanent and indexes them for inflation, a move backed by 86% of voters in NAR’s national survey. In addition, it preserves and makes permanent the mortgage interest deduction, which remains a crucial benefit for current and future homeowners. Finally, the legislation protects Section 1031 like-kind exchanges and leaves business SALT deductions intact for most real estate professionals. Those deductions are critical tools for property investment and economic development.

In addition to NAR’s top tax priorities, the bill includes a broad range of other REALTOR®-supported provisions, such as enhancements to the low-income housing tax credit, estate tax certainty, renewed Opportunity Zone incentives, and the creation of tax-advantaged child investment accounts that can be used for qualified expenses of the beneficiary such as first-time home purchases—all of which strengthen housing affordability, investment, and generational wealth.

In a voter survey recently commissioned by the National Association of REALTORS®, 80% of voters supported key provisions that impact the real estate economy, from deductions for small businesses to incentives for community investment and housing development. For example, 91% of voters supported the retention of the MID, and 61% of voters support increasing the state and local tax deduction issue or removing limits altogether. 

You can find more details on each of the items mentioned above on the National Association of REALTORS® here.