Impact Report | One Big Beautiful Bill 2025

Impact on Real Estate Owners 

On May 22, 2025, the House passed the One Big Beautiful Bill Act of 2025 (OBBBA), a sweeping tax reform package with significant implications for real estate investors. Here’s what you need to know: 

100% Bonus Depreciation Reinstated 

Applies to assets acquired after Jan 19, 2025, and placed in service before Jan 1, 2030. This includes real property used in production (e.g., HVAC, fixtures). Real estate owners can deduct the full cost immediately, boosting cash flow. 

Increased Qualified Business Income (QBI) Deduction 

QBI deduction for pass-throughs increases from 20% to 23%, permanently. This reduces the effective tax rate to 28.49%, benefitting real estate professionals and STR investors. 

Expanded Section 179 Expensing 

Expensing limit raised to $2.5M, with a $4M phase-out threshold. Allows immediate deduction of equipment and improvements. 

EBITDA-Based Interest Deduction Returns 

From 2025–2029, interest deductions can be based on EBITDA instead of EBIT. Developers can deduct more interest and support leverage. 

Qualified Opportunity Zone (QOZ) Extension 

Extended to 2033, with new rural incentives including a 30% basis step-up after five years. Encourages rural real estate investment. 

Low-Income Housing Tax Credit (LIHTC) Expansion 

9% LIHTC restored with 12.5% increase for 2026–2029. 4% threshold lowered to 25%. Tribal and rural areas gain DDA status. 

Strategic Considerations 

Move Fast – Bonus depreciation is temporary. Accelerate acquisitions and cost seg studies. 

Maximize QBI & LIHTC – Ensure entity structure and project eligibility. 

Watch Legislation – Senate reconciliation may alter terms before final approval. 

Consult Experts – Partner with your tax advisor to apply these tools strategically.