Unlocking the Benefits of the Big Beautiful Bill for Real Estate Owners and Buyers

On July 4th, a significant piece of legislation known as the Big Beautiful Bill was enacted, offering a range of incentives for real estate owners and prospective buyers. If you’re involved in real estate, there are numerous reasons to be optimistic about the provisions included in this act.

Key Benefits of the Big Beautiful Bill for Real Estate

1. Permanent Low Income Housing Tax Credit

The Low Income Housing Tax Credit (LIHTC) has been made permanent, increasing by 12.5%. Additionally, the bond financing requirement has been reduced, along with a 30% basis boost for properties in rural and tribal areas. This change aims to enhance the supply of affordable housing and support entry-level home buyers.

2. Preservation of Section 1031 Like-Kind Exchanges

By retaining the Section 1031 Like-Kind Exchange provision, real estate investors can continue to defer capital gains taxes. This flexibility allows them to reinvest in other properties while maintaining cash flow.

3. Permanent Mortgage Interest Deduction

A permanent cap on the mortgage interest deduction has been established at $750,000, providing certainty for borrowers and solidifying homeownership as a favorable tax strategy.

4. Ongoing Mortgage Insurance Deduction

Borrowers can now permanently deduct payments made toward Private Mortgage Insurance (PMI), FHA Mortgage Insurance Premiums (MIP), VA funding fees, and USDA guarantee fees, subject to income restrictions. This will reduce the effective cost of low-down payment loans, making homeownership more accessible.

5. Temporary Increase of the SALT Deduction Cap

From 2025 to 2029, the SALT deduction cap has been temporarily raised from $10,000 to $40,000 per household. This change aims to assist homeowners in high-tax states over the next four years.

6. Restoration of 100% Bonus Depreciation

With the reinstatement of 100% bonus depreciation, property owners engaged in new construction, acquisitions, or renovations will greatly benefit from improved tax treatment.

7. Permanent 20% Deduction for Qualified Business Income

Most real estate income qualifies as a trade or business under IRS guidelines, allowing real estate investors to deduct 20% of their net rental income, effectively lowering their tax liabilities and improving investment yields.

8. Maintenance of Gain on Sale Rollover Provision

Real estate owners will continue to benefit from the ability to roll over gains from property sales into opportunity zones and other tax-advantaged structures.

Consult a Tax Professional

While this article highlights the key provisions affecting home buyers and investors, the act comprises numerous additional elements designed to stimulate the economy. Among them are the increase in the Section 179 expensing cap, the elimination of the 899 retaliatory tax, and a permanent small business estate tax exemption. The estate tax threshold has been set at $15 million and will adjust with inflation, facilitating easier generational wealth transfer without burdensome tax obligations.

Investment in U.S. Infrastructure

The Big Beautiful Bill also encourages companies to invest in American manufacturing by constructing factories domestically and hiring local labor, which could improve job opportunities and raise real wages.

As import prices decline and inflation stabilizes, home buyers may find this act beneficial for building family wealth through real estate ownership. A potential market correction combined with lower interest rates and favorable tax provisions could be the solution many buyers have been waiting for.

Best Place to Search for Real Estate

For thorough real estate listings, visit Lee County Online. This platform consolidates all listings, bypassing restrictions that some major portals impose, ensuring you access real-time data on available properties.

Explore neighborhoods, view sold data, and obtain home value estimates all in one convenient site. You can even save your search parameters and receive instant notifications for new listings or price changes.

Ready to Take the Next Step?

If you’re considering buying or selling real estate, our knowledgeable team is available to assist you. We focus on your unique needs and offer insights that may help you make informed decisions. Call us at 239-489-4042 for a personalized consultation.

Explore the potential benefits of the Big Beautiful Bill for your real estate goals today!