The “One Big Beautiful Bill” is a legislative proposal aimed at revitalizing the economy through targeted tax reforms. By incentivizing investment, business activity, and spending, the bill offers particularly promising benefits for the real estate industry. Among its most impactful provisions are changes to how property depreciation is handled and how much state and local tax can be deducted—making it easier and more profitable to invest in, develop, and own real estate.
Key Provisions and Their Positive Impact
1. Mortgage Interest Deduction
The bill makes permanent the existing mortgage interest deduction, allowing homeowners to deduct interest on mortgage debt up to $750,000. This provides ongoing tax relief for homeowners and supports long-term homeownership affordability.
2. Estate, Gift, and Generation-Skipping Transfer Tax
The bill increases the exemption thresholds for estate, gift, and generation-skipping transfer taxes to $15 million per individual and $30 million for married couples, with annual adjustments for inflation. This has major implications for estate planning, especially where real estate is involved.
3. Mortgage Insurance Deductibility
A previously expired deduction has been reinstated, allowing mortgage insurance premiums—such as those paid for FHA, USDA, or private mortgage insurance—to once again be tax-deductible. This change lowers the financial burden for many homeowners and buyers.
4. SALT Deduction Cap Increase
The State and Local Tax (SALT) deduction cap has been raised from $10,000 to $40,000. This is especially significant for homeowners in high-tax states like California, New York, and New Jersey. With this increase, taxpayers can deduct a much larger portion of their state and local taxes, resulting in greater financial relief and improved housing affordability.
5. 100% Bonus Depreciation
This provision allows investors to immediately write off the full cost of certain qualifying property and improvements (with a recovery period of 20 years or less) in the year they are placed in service. This accelerates return on investment, frees up capital, and encourages both residential and commercial real estate development.