NAR’s Top Five Real Estate Wins in the U.S. Tax Reform Bill, Additional Tax Reform Bill Provisions Supportive of the Real Estate Industry, NAR Polling that Supported Real Estate Provisions in the Tax Reform Bill
As of this writing on Wednesday, July 2nd the U.S. Senate version of the tax reform bill, commonly referred to as the One Big Beautiful Bill, was passed on July 1st which will now be headed to the U.S. House of Representatives to take up and potentially approve this Senate-Amended version. In this GAD Top 3, we will take a look at the tax reform legislation from the real estate perspective, including major real estate provisions championed by the National Association of REALTORS (NAR), other provisions that support homeownership and strengthen the real estate economy, and the NAR national surveying that built support and momentum for real estate provisions in the bill. All of this content is courtesy of the National Association of REALTORS (NAR). You can read more detailed information from NAR on the real estate provisions of the tax reform bill here and here, or listen to ‘The Advocacy Scoop’ breakdown of the tax reform bill here.
1. NAR’s Top Five Real Estate Wins in the U.S. Tax Reform Bill
NAR was able to include in the tax reform bill their five key priorities:
- A permanent extension of lower individual tax rates, which will also be indexed against inflation
- An enhanced and permanent qualified business income deduction (Section 199A) from 20% to 23%, providing meaningful tax relief to the more than 90% of NAR members who are independent contractors or small business owners
- A temporary (five-year) quadrupling (from $10,000 to $40,000 for households earning under $500,000) of the state and local tax (SALT) deduction cap, beginning for 2025
- Protection for business SALT deductions and 1031 like-kind exchanges for most real estate professionals
- A permanent extension of the mortgage interest deduction
2. Additional Tax Reform Bill Provisions Supportive of the Real Estate Industry
Several other provisions in the tax reform bill supported by NAR would also have a positive impact on the real estate sector. They include:
- Low-Income Housing Tax Credit (LIHTC): Key provisions from the LIHTC Improvement Act are included on a permanent basis to support affordable housing development.
- Child Tax Credit Increased to $2,200: Permanently raises the credit, with inflation indexing. This provision could ease housing affordability for families.
- Permanent Estate and Gift Tax Threshold Set at $15 Million (Inflation-Adjusted): Prevents a sharp drop in exemption levels and supports generational wealth transfer.
- Immediate Expensing for Certain Industrial Structures: Applies to facilities used in manufacturing, refining, agriculture and related industries.
- No Changes to Carried Interest Rules
- Strengthened Opportunity Zones: Renewed with revised incentives to promote targeted investment, including in rural areas. NAR polling found that 80% of voters support such tax incentives to drive economic development in underserved communities.
3. NAR Polling that Supported Real Estate Provisions in the Tax Reform Bill
Original polling commissioned by NAR in May played a critical role in building support and momentum for real estate provisions in the tax reform bill. NAR’s national survey found overwhelming public support for the real estate provisions of the tax reform bill. These included:
- 92% support tax-free savings accounts for first-time homebuyers
- 91% support preserving tax incentives like the mortgage interest deduction
- 86% support maintaining lower-income tax rates for individuals and married couples
- 83% support the 20% deduction for independent contractors and small businesses
- 61% support increasing SALT (state and local tax) deduction limits or removing limits altogether
- 86% of voters supported the bill’s lower individual tax rates, one of NAR’s core advocacy priorities.
