Bonus Depreciation Is Back: What It Could Mean for Real Estate Investors

The House Ways and Means Committee has advanced a tax bill that, if it passes a House vote next week as expected and is signed into law, will reinstate 100% bonus depreciation retroactive to January 20, 2025, and extend it through 2029.

This provision would allow investors to immediately deduct the full cost of qualifying property in the year it's placed in service, rather than depreciating it over time. For real estate investors, that could mean significant short-term tax savings and enhanced cash flow.

Key Implications for Investors

💸 Accelerated DeductionsImmediate expensing of qualifying improvements and equipment can lead to substantial tax savings in the year of acquisition.

💼 Enhanced Cash FlowBy reducing taxable income up front, investors may retain more capital for reinvestment or reserve purposes.

🧠 Strategic PlanningInvestors considering property acquisitions or value-add improvements may want to act now to align with the potential reinstatement timeline.

What to Consider

While this bill appears to have momentum, it hasn’t passed yet. And even when it does, it’s essential to consult with a tax advisor to understand how the provision applies to your specific investments—especially if you're involved in short-term rentals, partnerships, or commercial property.

Staying ahead of these changes can help you make the most of 2025’s opportunities—and position your real estate portfolio for maximum efficiency. As always, if I can be of assistance, please reach out!