On July 4, 2025, President Trump signed the One Big Beautiful Bill (OBBBA) into law, marking one of the most significant tax overhauls since the 2017 Tax Cuts and Jobs Act. While political views on the legislation are diverse, there is near-universal consensus in the real estate world: this is a major win for investors.
From bonus depreciation to opportunity zones, this 887-page package reshapes the tax landscape for multifamily and commercial real estate (CRE), offering both immediate benefits and long-term strategic clarity.
Here are the top 10 takeaways you need to know:
Multifamily & Syndication Investor Wins
1. 100% Bonus Depreciation Returns (2025–2029)
Full bonus depreciation is officially back and locked in for five years. This allows investors to deduct 100% of qualifying property improvements and equipment costs in the first year.
- $10M property = $4M+ first-year deduction
- At 37% tax rate = $1M in tax savings
- Enhanced paper losses passed to LPs
2. 1031 Exchanges Remain Intact
The popular tax-deferral tool survives untouched. Continue rolling proceeds into future deals without triggering capital gains tax.
3. SALT Deduction Cap Raised
The State and Local Tax deduction cap is increased from $10K to $40K for joint filers under $500K AGI, with entity-level deductions still allowed for pass-throughs.
4. QBI Deduction Extended & Expanded
The 20% Qualified Business Income (QBI) deduction is enhanced with a broader income phase-in, potentially saving $40K–$50K per $1M of partnership income.
5. Permanent Tax Brackets + Standard Deduction Bump
The 2017 tax brackets are made permanent through 2028, locking in the 37% top rate and a higher standard deduction—providing consistency for planning and modeling returns.
Broader CRE & Business Tax Wins
6. CRE Manufacturing Depreciation Expansion
Manufacturing-related real estate can now also be fully depreciated in year one—a move expected to unlock over $200B in tax incentives for industrial and factory development.
7. Immediate Deduction of R&D Expenses
Domestic research and development costs are now immediately deductible, likely boosting demand for lab, flex, and innovation corridor real estate.
8. Interest Deductibility Made Permanent
CRE owners can permanently deduct interest based on EBITDA (not EBIT), helping highly leveraged investments remain viable amid rising interest rates.
9. Foreign Capital Remains Untaxed
The previously proposed “revenge tax” of 5% to 20% on foreign investors has been eliminated. Access to international capital markets remains open.
10. Opportunity Zones Made Permanent & Expanded
The OZ program gains permanent status, with broader geographic eligibility. This removes exit-date uncertainty and invites long-term capital into underserved areas.
Final Thoughts: A New Chapter for Real Estate Tax Strategy
The One Big Beautiful Bill marks a powerful shift in the tax environment—not just a short-term boost but a durable framework for optimized returns.
Whether you’re a passive investor in multifamily syndications, a GP evaluating cost seg opportunities, or a CRE developer weighing capital sources, this bill opens the door to:
- Higher after-tax returns
- Reduced taxable income
- Smarter capital deployment
- Greater long-term portfolio flexibility
With 2026 fast approaching, now is the time to re-evaluate your investment strategy, get positioned, and leverage the full power of these updates.
