The One Big Beautiful Bill Is Now Law
On July 4, 2025, the "One Big Beautiful Bill" was officially signed into law, bringing with it sweeping tax changes that are now set to impact real estate investors, developers, and operators across the country. This follows a close 218 to 214 House vote on July 3 after the Senate passed the final version.
For those who have been following our original analysis, here’s what the final version of the bill means in practice.
100 Percent Bonus Depreciation Is Back
One of the most significant changes for real estate investors is the return of 100 percent bonus depreciation for qualifying assets placed in service between January 1, 2025 and December 31, 2029. This provision allows investors to deduct the full cost of eligible property improvements and components in the first year rather than depreciating them over time. The change applies to both residential and commercial properties and may substantially increase year-one deductions when paired with a cost segregation study.
Section 179D and 45L Incentives Extended
Energy-efficiency incentives received renewed support. The Section 179D deduction for commercial buildings remains in effect, offering deductions up to $5.80 per square foot for energy-efficient construction or upgrades that meet prevailing wage and apprenticeship standards. The Section 45L credit for residential developers was extended through December 31, 2025. Projects that qualify under updated energy codes can receive between $2,500 and $5,000 per unit.
Opportunity Zones Extended Through 2033
The Opportunity Zone program, previously scheduled to sunset in 2026, has now been extended through 2033. This offers long-term investors additional runway to defer and potentially reduce capital gains taxes while investing in designated low-income or underserved areas. The updated bill also emphasizes rural zones and new tracts, which may reshape investment targets in the years ahead.
Other Key Tax Provisions
The final bill includes additional tax changes that, while not specific to real estate, may affect how investors structure their businesses. The Qualified Business Income (QBI) deduction has increased from 20 percent to 23 percent starting in 2026. Several individual tax provisions from the 2017 Tax Cuts and Jobs Act have been made permanent, including the expanded standard deduction. While these may not directly relate to property holdings, they contribute to broader financial planning for pass-through business owners.
What Investors Should Do Now
With the bill now signed into law, investors have clarity and can act accordingly. Here are key next steps:
Schedule a cost segregation study for any properties placed in service this year
Accelerate residential construction timelines to capture 45L credits before they expire
Reassess Opportunity Zone strategies with an eye toward newly qualified areas
Review your overall tax planning strategy with a professional, especially if you are unsure whether you qualify as a Real Estate Professional under IRS guidelines
The new law opens up substantial opportunities for those positioned to act. As always, ProperXit encourages all investors to speak with their CPA or tax advisor to determine the best course of action for their individual situation.
We will continue to monitor guidance from the IRS and Treasury and provide additional insights as implementation details unfold.
