New Tax Cuts Reshape the Real Estate Landscape
- Corey Cohen
- Jul 11
- 2 min read
The One Big Beautiful Bill, signed into law on July 4, brings several tax changes with meaningful implications for real estate.
SALT Deduction - Big Impact in High-Tax Areas
The cap on the State and Local Tax (SALT) deduction rises from $10,000 to $40,000 through 2029, reverting in 2030. This enhanced deduction is available to households earning under $500,000, and phases out entirely around $600,000. For property owners in high-tax states like New York, New Jersey, and California, the change restores a significant deduction that was largely erased in 2017—offering thousands in annual tax relief and renewed affordability in premium ZIP codes.
Mortgage Insurance Premium Deduction Returns
The deduction for mortgage insurance premiums (PMI, FHA, VA, etc.) is reinstated and made permanent. For buyers putting down less than 20%, this can translate to thousands in annual savings - especially meaningful in markets where entry prices are high and loan-to-value ratios are stretched.
Major Boost for Investors & Developers
100% bonus depreciation is permanently restored for personal property like appliances, fixtures, and land improvements. It’s also temporarily extended for certain structures that begin construction between 2025 and 2029 and are placed in service by 2031. Additionally, specialized commercial assets tied to manufacturing or production are eligible through 2030.
The Section 179 expensing cap is increased to $2.5 million, allowing more up-front deduction of capital expenditures. The pass-through business deduction under Section 199A is also made permanent at 20%, offering long-term tax savings to LLCs, partnerships, and S corps—structures common in real estate ownership and development.
Affordable Housing & Opportunity Zones
The Low-Income Housing Tax Credit (LIHTC) sees a 12.5% increase in allocation, and the bond financing threshold for 4% credits drops from 50% to 25%, unlocking more affordable housing development potential through 2035.
Opportunity Zones are made permanent, with new rural designations, recurring 10-year terms beginning in 2026, and simplified gain deferral rules. These changes provide stability and expanded reach for long-term, community-focused development projects.
What’s Not Included
Federal green-building tax credits - including 179D and 45L - will expire in mid-2026. These programs have historically supported sustainable construction and may now require replacement incentives. Many of the new provisions sunset by 2030, and the bill’s contribution to the national deficit increases the chance of future tax policy changes.
Who Benefits?
Homeowners & Buyers: Greater deduction room via SALT and PMI provisions helps improve affordability, especially for move-up buyers and refinancers in high-tax states.
Investors & Developers: Faster cost recovery and improved cash flow through bonus depreciation, Section 179, and permanent pass-through deductions.
Affordable Housing Sponsors: Expanded credit allocations and relaxed bond rules increase project viability.
Commercial & Industrial Owners: Permanent Opportunity Zone provisions and extended depreciation windows support long-term redevelopment and industrial growth.
Bottom Line
This legislation offers meaningful financial advantages across the real estate spectrum—from improved homeownership affordability to stronger investor returns. Many provisions are time-sensitive, with key benefits set to expire by 2030.
If you're considering buying, selling, developing, or leasing real estate, this is a smart moment to revisit your strategy. Reach out if you'd like to understand how these changes could affect your next move.
Best,
Corey Cohen
Founder
The Roebling Group
646.939.7375
@mrcoreycohen
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