🏛️ Now Law: What the New Tax Legislation Means for Real Estate Investors

Michael Routh
2 days ago
3 min read

The dust has settled on Capitol Hill—and one of the most consequential tax updates in recent memory is now official. The sweeping tax bill, informally dubbed the “Big Beautiful Bill,” has passed both chambers of Congress and been signed into law, bringing with it a slate of changes that directly impact real estate investors and high-net-worth property owners alike.

Whether you own a luxury vacation home, a portfolio of rentals, or are evaluating your next acquisition, here’s what the new legislation means for you—and why 2025 may be the year to act.

✅ 100% Bonus Depreciation Is Back—and Retroactive

Arguably the headline win for real estate investors: 100% bonus depreciation has been reinstated retroactively to January 1, 2025, and extended through the end of 2029—with no phase-down.

What this means:

Investors can now immediately deduct the full cost of qualifying property improvements or acquisitions in the year they’re placed into service.
This improves cash flow, enhances after-tax returns, and makes 2025 an ideal year to deploy capital efficiently.
Applies broadly—from luxury short-term rentals to single-family rentals, multifamily, mixed-use properties, and even self-storage.

✅ QBI Deduction Preserved for Pass-Through Income

The bill also preserves the 20% Qualified Business Income (QBI) deduction for income earned through pass-through entities like LLCs—great news for real estate investors.

What this means:

Many investors managing rental portfolios through pass-through entities can continue reducing taxable income on qualified earnings.
Expanded income thresholds (now $150K for married filers) make this benefit more accessible.
For those balancing multiple income streams, this remains a cornerstone for efficient tax planning.

🔧 Additional Tax Provisions to Know

🧪 R&D Expensing Restored:If your business includes construction innovation, tech development, or any property-related R&D, the ability to immediately deduct domestic research expenses is back in place.

🏠 Section 179 Expansion:Small business owners and investors benefit from expanded Section 179 expensing—now up to $2.5 million.

💵 SALT Cap Raised:For high-income earners in high-tax states, the State and Local Tax (SALT) deduction cap has been temporarily raised from $10K to $40K through 2029—a meaningful shift for strategic filers.

🏡 Mortgage Interest Deduction Holds:The $750K mortgage interest deduction limit is now permanent, maintaining predictability for second-home and luxury buyers.

👨‍👩‍👧 Estate & Child Tax Credits Expanded:Estate and gift tax exemptions have increased, now approaching $15M (indexed), alongside enhancements to the child tax credit—less relevant to real estate, but worth noting for family wealth planning.

💼 What This Means for Real Estate Investors

Whether you’re holding long-term rentals, buying value-add multifamily, or owning a second home with lifestyle upside, this law provides an array of benefits. Key takeaways:

Improved deductions = stronger after-tax returns.
Bonus depreciation can offset large gains or active income.
QBI adds another layer of efficiency for rental operations.

Importantly, many investors who own luxury real estate also have holdings in other sectors—like college housing, commercial multifamily, or self-storage. These provisions apply across asset types and may prompt a broader portfolio review for optimal positioning.

And for sellers, the window may be ideal to reposition from less tax-efficient properties, freeing up capital for opportunities with better upside under the new rules.

🧭 Final Thoughts

For months, investors waited for clarity—and now we have it. With bonus depreciation restored and QBI intact, 2025 is shaping up to be a strategic year for tax-aware investing.

Whether you’re buying, selling, upgrading, or simply optimizing, now is the time to evaluate how the new law can work for you.

If you’d like to run the numbers together, talk strategy, or just explore how this might fit into your broader goals—I’m here to help. No pressure. No pitch. Just insight.

Let’s make sure your real estate supports the next chapter of your wealth strategy.