One Big Beautiful Bill Act

In a razor-thin 215–214 vote, the U.S. House of Representatives has passed the “One Big Beautiful Bill Act,” a sweeping tax reform package that delivers major victories for the real estate industry. Backed by President Trump and championed by House Speaker Mike Johnson, the bill makes permanent many provisions from the 2017 Tax Cuts and Jobs Act and introduces new measures aimed at boosting homeownership, investment, and generational wealth. The National Association of REALTORS® (NAR) secured several top priorities in the bill, including enhancements to the Qualified Business Income deduction, a quadrupling of the SALT deduction cap, and preservation of the Mortgage Interest Deduction.

Real Estate Sector Sees Major Tax Benefits

The bill includes several provisions that directly support the real estate sector and NAR members:

• Qualified Business Income Deduction: Permanently increases the deduction from 20% to 23%, benefiting over 90% of NAR members classified as independent contractors or small business owners.

• State and Local Tax (SALT) Deduction: Raises the cap from $10,000 to $40,000 for households earning under $500,000, with the cap and income threshold increasing 1% annually over 10 years.

• Mortgage Interest Deduction (MID): Preserves and makes permanent the MID at its current level, maintaining a key tax benefit for homeowners.

• Section 1031 Like-Kind Exchanges: Protects this provision, which is vital for real estate investors.

• Low-Income Housing Tax Credit (LIHTC): Includes enhancements to support affordable housing development.

• Estate and Gift Tax Exemption: Permanently sets the threshold at $15 million, indexed for inflation, aiding in generational wealth transfer.

These measures are designed to strengthen housing affordability, investment, and generational wealth, aligning with NAR's advocacy efforts.

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Broader Tax Changes Affecting Homeownership

Beyond real estate-specific provisions, the bill introduces several tax changes that could impact homeowners and prospective buyers:

• Individual Tax Rates: Makes the current lower individual tax rates permanent and indexes them for inflation, aiding taxpayers and improving affordability for prospective homebuyers.

• Child Tax Credit: Temporarily increases the credit to $2,500 through 2028, then indexes it for inflation starting in 2029.

• Tax-Advantaged Child Investment Accounts: Creates accounts that can be used for qualified expenses such as first-time home purchases.

• Standard Deduction: Temporarily boosts the standard deduction by $1,000 for individuals and $2,000 for joint filers.

These provisions aim to increase homeownership access for more American families.

Controversial Provisions and Political Dynamics

The bill also includes measures that have sparked debate:

• Medicaid and SNAP Changes: Imposes work requirements for able-bodied adults without children and cuts federal funds to states providing coverage to undocumented immigrants.

• Clean Energy Tax Credits: Rolls back some of the clean energy tax credits under the Biden-era climate and health care law.

• Debt Ceiling: Raises the debt ceiling by $4 trillion, with concerns about increasing the federal deficit.

The passage of the bill marks a significant legislative victory for President Trump and House Republicans, but it faces an uncertain future in the Senate, where further negotiations and amendments are expected.

Next Steps

The bill now moves to the Senate, where it is expected to undergo further scrutiny and possible revisions. NAR has pledged to remain actively engaged with lawmakers to ensure that real estate remains a central focus in the final legislation.

For real estate professionals and homeowners, the bill's provisions could offer substantial benefits, but the final outcome will depend on the Senate's actions in the coming weeks.

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