“One Big Beautiful Bill” (OBBBA)

Here's how the new “One Big Beautiful Bill” (OBBBA) is poised to impact real estate across the U.S.:

1. Homeowners & Buyers

• Mortgage Insurance Deduction Returns: Homebuyers with lower down payments can deduct mortgage insurance premiums again—averaging around $2,364/year if they itemize their deductions. Property Exemption+15Investopedia+15Forbes+15.
• Expanded SALT Deduction Cap: The cap on state and local tax deductions increases from $10,000 to $40,000 (through ~2030), benefiting buyers and homeowners in high-tax states like NY, CA, and NJ. MarketWatch+3Investopedia+3Integrity Property Management+3.

2. Affordable & Rental Housing Developers

• Boosted Low-Income Housing Tax Credit (LIHTC): Allocation increases by ~12–13%, enabling the development and preservation of over 1 million affordable units by 2035.
• Enhanced Opportunity Zones Program: Made permanent with enhancements like rural investment incentives and tighter geographic targeting (starting 2027), encouraging new development outside major metros. The Real Deal+2Kiplinger+2Lana Development+2.

3. Real Estate Investors & Developers

• Full 100% Bonus Depreciation: Reinstated permanently for property improvements (e.g., HVAC, appliances) placed in service after Jan 2025. Great for flipping, rehab, or renovation projects. Integrity Property Management+3CSA Partners+3EisnerAmper+3.
• Improved §179 Expensing (Bonus for Energy Efficiency): Section 179D extended through 2026, offering up to $5.81/sq ft deductions for qualifying commercial buildings that meet energy/wage thresholds. Lana Development+2CSA Partners+2Wikipedia+2.
• QBI Deduction Increased: Qualified Business Income deduction raised from 20% to 23%, aiding small real estate businesses, LLC owners, and agents. National Association of Realtors+3EisnerAmper+3Lana Development+3.
• Estate & Gift Tax Exemption Raised: Estate planning for real estate holders becomes more flexible with exemption raised to $13.99M (single) / $27.98M (married) starting in 2026. Kiplinger.

4. Shifts in Construction & Green Incentives

• Green retrofitting credits trimmed: The bill reduces federal incentives like the Green and Resilient Retrofit Program, affecting planned energy-efficiency projects—especially in multifamily housing. Integrity Property Management+8Innovative Mortgage Brokers+8The Real Deal+8.
• Some renewable energy incentives phased out—affecting investor appetite in solar, EV, and other clean tech sectors tied to real estate development.

Market & Strategy Implications

• Increased buyer demand in high-tax states due to SALT expansion—may push prices upward in those markets.
• More capital flow into real estate—favorably structured by bonus depreciation and QBI, especially among investors.
• Affordable housing pipeline expands — backed by LIHTC and Opportunity Zone extensions.
• Tax benefits amplify returns—making real estate more appealing vs other asset classes.
• Policy reduces public funding support for climate retrofitting—might slow green redevelopment projects.

Bottom Line
The OBBBA delivers broad support for the real estate sector:

• Buyers get tax relief and more itemized deductions.
• Investors & developers get renewed depreciation tools, more incentive to renovate or build.
• Affordable housing funding gets boosted for the next decade.
• Some clean energy programs scaled back, but the overall tax landscape is strongly real estate-friendly.