One Big Beautiful Bill - Major Gains for CRE Investors

 

 

🏗️ The “Big Beautiful Bill” Is a Game-Changer for CRE Investors: Here’s What You Need to Know

On July 4, 2025, the “One Big Beautiful Bill” was signed into law—and for those of us in commercial real estate, it’s a powerful package that delivers both immediate and long-term tax benefits. Whether you're investing in industrial, retail, multifamily, or development deals, this legislation creates real opportunities to improve cash flow, reduce tax liability, and gain investment planning certainty.

Here’s a breakdown of the key CRE-friendly provisions:

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💰 1. 100% Bonus Depreciation Is Back

Accelerate your returns—nonresidential real estate assets like HVAC systems, lighting, and leasehold improvements can now be fully depreciated in the year they’re placed in service. Cost segregation studies just became even more valuable.

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🏘️ 2. QBI Deduction Made Permanent (and More Generous)

The 20% deduction for pass-through income (LLCs, S-corps, REITs) is now permanent—and increased to 23% for many investors. This adds up to serious long-term tax savings.

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📉 3. Interest Expense Deductions Expanded

Highly leveraged deals get a break. The cap on interest deductions has been relaxed through 2029, allowing more room to finance acquisitions and development without sacrificing tax efficiency.

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⚡ 4. Bigger Deductions for Energy-Efficient Projects

Section 179 and Section 179D incentives for energy-efficient construction and retrofits have been increased. There’s also a boost to 45L credits for multifamily projects. These are huge wins for developers and owners focused on ESG and sustainability.

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🌆 5. Opportunity Zones Made Permanent

OZ incentives no longer sunset. Investors can now plan long-term strategies around capital gains deferral and forgiveness—especially attractive in underserved and rural areas.

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🏗️ 6. Low-Income Housing Tax Credit (LIHTC) Strengthened

The bill includes a 12% increase in LIHTC allocations and loosens requirements for bond-financed deals. If you’re involved in affordable housing, this is your green light.

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📈 What Should Investors Do Now?

• Act Quickly: Many of the biggest benefits—like bonus depreciation and interest relief—expire in 2029.

• Re-evaluate CapEx Plans: This is the time to greenlight property upgrades and improvements.

• Lean Into OZ and LIHTC: These programs now offer a runway for generational tax planning.

• Consult Your Tax Team: With expanded incentives come added complexity. Make sure you're set up to maximize them.

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This legislation may not solve every challenge in the market, but it does give CRE investors a powerful tax and cash flow toolkit. If you’ve been on the fence about a new project or asset upgrade, this could be the incentive that tips the scale.

Let’s talk if you want to explore how this bill could impact your portfolio or upcoming projects.