6 Ways the ‘One Big Beautiful Bill’ Impacts Real Estate Investors

On July 4th, 2025, H.R. 1 was signed into law. Dubbed the “One Big Beautiful Bill”, this is a mammoth reconciliation package that, amongst other things, locks in and expands on the tax cuts from the 2016 Trump administration, overhauls spending on social safety nets, and raises the debt ceiling by roughly $5 trillion. 

For real estate investors, the bill cements many powerful tax breaks and depreciation rules that were set to expire, while also ushering in new incentives (and risks) that will shape deal economics through at least 2030.

How Will The Bill Affect Real Estate Investors?

1. Pass‑Through Deduction Made Permanent (IRC §199A)

What Changes?

Under current law, the 20% Qualified Business Income (QBI) deduction for pass‑through entities (LLCs, S‑corps, partnerships) was scheduled to sunset after 2025. OBBB not only makes it permanent but boosts the rate from 20% to 23%, with a redesigned phase‑out regime for higher earners that reduces the abrupt cutoff under today’s rules.

Investor Impact

• Lower Effective Tax Rates: Rental and development income flowing through pass‑through entities can now be taxed at a lower effective rate, potentially saving 3–5 percentage points for high‑bracket investors.
• Reduced Uncertainty: Permanence removes the looming “tax cliff” and encourages longer‑term hold strategies, syndications, and large‑scale developments.
• Wider Eligibility: The more gradual phase‑out widens access for investors just above the current thresholds, including those in higher‑priced markets.

2. Extended 100% Bonus Depreciation & Expanded Sec. 179

What Changes?

Bonus Depreciation is reinstated at 100% for assets placed in service between January 20, 2025, and December  31, 2029 (reverting to zero in 2030). Section 179 expensing jumps from $1 million to $2.5 million, with a $4 million phase-out threshold—both indexed for inflation starting in 2026.

Investor Impact

• Accelerated Cost Recovery: Immediate write‑offs for appliances, HVAC systems, and other building components super‑charge year‑one cash flows, ideal for BRRRR (“Buy, Rehab, Rent, Refinance, Repeat”) and value-add multifamily plays.
• Planning Flexibility: Larger and more predictable expensing thresholds allow investors to bundle capex projects without worrying about losing depreciation benefits mid‑year.

3. Mortgage Interest & SALT Deduction Preservation

What Changes?

Mortgage Interest deductions remain capped at $750,000 of acquisition debt, permanently. SALT Cap increases from $10,000 to $40,000 for 2025 ($20,000 for those married filing singly), phasing down by 30% of MAGI over $500,000 (or over $250,000 for those married filing singly), but never below $10,000/$5,000. Both limits will grow about 1% annually through 2033 and then freeze.

Investor Impact

• Residential Developers & Owner‑Landlords: Continued ability to shelter mortgage interest remains a key incentive in high‑rate environments.
• High‑Tax States: Investors in California, New York, and other high‑SALT jurisdictions get meaningful relief, up to $40,000/year, for four more years.

4. Opportunity Zones & Rural Real Estate Incentives

What Changes?

The bill continues Opportunity Zone (OZ) benefits through 2033, adds stricter definitions (including a 33% rural carve‑out), and boosts basis step-up rules for qualified rural opportunity funds. It also introduces RC §139K, allowing lenders to exclude up to 25% of interest income on rural/agricultural real estate loans through 2028.

Investor Impact

• Deferred‑Gain Capital Access: Extended timelines and rural incentives may unlock fresh flows into overlooked markets.
• Lender Benefits: Community banks and specialty lenders can boost net yields on farm‑secured loans, potentially spurring more rural development.

5. REIT & TRS Enhancements

What Changes?

Under H.R. 1, REIT dividends retain favorable pass-through treatment under §199A. The Total Return Swap (TRS) asset limit is restored from 20% to 25%, allowing REIT subsidiaries more flexibility in owning service businesses.

Investor Impact

• After‑Tax Yield: Lower taxes on ordinary REIT dividends can lift net yields by up to 4–5%, enhancing total returns in core strategies.
• Operational Flexibility: REITs can expand into lodging, storage, or other service businesses within their TRS without triggering qualification issues.

6. Estate‑Planning Windfalls

The federal estate and gift tax exemption is permanently fixed at $15 million (single) / $30 million (coupled), indexed for inflation, with no sunset.

Investor Impact

• Tax-free wealth transfers: High‑net‑worth families can now pass on sizable real estate holdings, including large rental portfolios, without ever triggering estate tax.
• Strategic planning clarity: Permanent exemption levels aid in structuring trusts, LLCs, and 1031-type rollovers with better visibility.

Pros & Cons Of The ‘One Big Beautiful Bill’ for Real Estate Investors

The bill itself is incredibly divisive—unsurprising when you consider just how many aspects of American life it touches. At nearly 800 pages, it impacts vast swathes of legislation. At its core, however, it’s a spending bill: increasing the budget for ICE, cutting taxes and regulations for businesses and investment, and reducing social spending on programs like Medicare and food stamps.

For real estate investors, the extended and expanded tax cuts, as outlined above, are largely favorable, increasing margins and profitability while lowering barriers to investment. As Ross Albers, CEO and Founder of Albers & Associates, puts it:

“The bonus depreciation could spur investors to fast‑track renovations and upgrades to take advantage of the accelerated depreciation schedule… It also increases the overall return on investment, which could affect how aggressively firms underwrite deals.”

Still, the bill’s sheer size and implications for national debt introduce potential risks. Max Gokhman, Deputy Chief Investment Officer at Franklin Templeton, warns:

“The impact of this bill on the real economy is going to fall far short of the negative impact of debt issuance that it comes with.”

While the short-term gains for real estate investors—especially around depreciation and tax treatment—are promising, it’s important to consider how broader economic consequences might affect interest rates, inflation, or investor sentiment in the long run.

Below, we go into a little more detail as to the pros and cons for real estate investors.

Pros for Real Estate Investors 

• Tax Certainty: Permanence on key deductions like the pass-through tax deduction makes long-term financial planning easier.
• Enhanced Cash Flow: 100% bonus depreciation and elevated Sec. 179 thresholds super‑charge early‑year write‑offs.
• Broader QBI Access: Expanded phase‑outs let more investors benefit, especially just above income thresholds.
• Estate‑Planning Leverage: High exemptions support generational wealth transfers without forced asset sales.
• OZ & Rural Incentives: New basis boosts and interest exclusions open fresh rural and underserved market opportunities.

Cons for Real Estate Investors

• Deficit Concerns: CBO estimates a $3.3 trillion deficit increase over 10 years. Higher Treasury yields could drive up mortgage rates and negatively impact economic growth.
• Clean Energy Rollback: Expiration of residential clean energy credits after 2025 reduces ROI on solar/green upgrades that have already been made or planned.
• Social Safety Net Cuts: Cuts to Medicaid and SNAP may stress lower‑income tenants, increasing rent default risk in Class C/B markets.
• Sunsetting Provisions: Many incentives (bonus depreciation, elevated SALT cap, clean energy credits) still expire between 2028 and 2030.
• Complexity & Compliance: New rules around OZs, rural carve‑outs, and SALT workarounds create planning burdens and potential audit triggers.

Strategic Recommendations for Real Estate Investors

To make the most of this new legislation and the favorable tax cuts, now is the moment to revisit cash-flow models, refinance strategies, and development plans.

1. Accelerate Major Capex: Schedule roof, appliance, and systems upgrades before year‑end 2029 to lock in 100% bonus depreciation.
2. Entity Structure Review: Confirm that your LLCs/partnerships meet the “qualified trade or business” tests under §199A and consider state‑level SALT workarounds before tighter restrictions kick in.
3. Opportunity Zone Re‑Evaluation: Revisit existing OZ commitments for new rural‑focused funds, taking advantage of basis‑step enhancements and reporting windows.
4. Estate‑Plan Updates: Engage your attorneys to amend trusts, wills, and family limited partnerships to utilize $15 million exemptions, especially if you hold appreciating assets.
5. Hedge Interest Exposure: Monitor Treasury yields and Fed guidance; balance fixed vs. floating mortgage debt to mitigate potential rate spikes tied to larger deficits.
6. Energy Upgrade Timing: If you’ve been planning solar or HVAC overhauls for clean energy credits, accelerate before the Dec 31, 2025, phase‑out.

Talk with your CPA to make a plan to best leverage these benefits.

Final Words: What Does ‘The One Big Beautiful Bill’ Mean for Real Estate Investors

The One Big Beautiful Bill is a game-changer for real estate investors—delivering sweeping tax advantages like permanent QBI deductions, extended bonus depreciation, and enhanced estate-planning tools. But with great opportunity comes complexity. Navigating updated depreciation schedules, maximizing pass-through deductions, and tracking eligible capex expenses will require more than just a spreadsheet.

That’s where Landlord Studio comes in.

With automated income and expense tracking, smart reporting, and CPA-friendly exports, Landlord Studio empowers landlords to fully leverage the new tax benefits without missing a beat. Easily categorize costs for bonus depreciation, track capital improvements for Section 179, and maintain clean, accurate books that support estate planning and audit-readiness.

Whether you’re scaling up, repositioning your portfolio, or preparing for generational transfer, having the right tools in place is no longer optional—it’s essential. Landlord Studio helps you make smarter financial decisions, reduce tax liabilities, and stay compliant as the rules evolve.

Make the most of this new era in real estate investing—start with a platform built for it.