Understanding the One Big Beautiful Bill Act for Property Owners

Tax law changes can be a whirlwind for property owners, affecting everything from deductions to investment planning. The One Big Beautiful Bill Act (OBBBA), passed on July 4, 2025, brings significant updates that every property owner should know about, whether you own residential, rental, or commercial properties.

Insights for Homeowners

The OBBBA now allows private mortgage insurance and FHA premiums to be permanently deductible. However, this is valuable only if itemizing exceeds the standard deduction of $15,750 for individuals or $31,500 jointly. With the new SALT deduction cap at $40,000 for state, local, and property taxes—phasing out for those earning over $500,000—it’s important to evaluate if itemizing makes sense.

Unfortunately, there are no new federal down payment or first-time homebuyer tax credits. It’s wise to search for local, state, or employer assistance programs. Also, if you’re considering home energy upgrades, act swiftly—the 30% Residential Clean Energy Credit for solar installations and similar credits expire on December 31, 2025.

For Commercial Property Owners, Developers, and Investors

Great news: The 100% bonus depreciation for property placed in service starting January 19, 2025, is now permanent, aiding in long-term planning. Additionally, the 20% Qualified Business Income deduction is secured with new income phaseouts ($75k single, $150k joint).

Opportunity Zone incentives have been made permanent with new 10-year designations beginning in 2027, offering special benefits for rural zones. There's a call to action for developers to take advantage of Section 179D ($5.81/sq ft for energy upgrades) and Section 45L (up to $5,000 per unit) before June 30, 2026. Remarkably, builders from 2022 may amend returns to retroactively claim the 45L credit.

Next Steps

Assess your current tax position to see if itemizing is beneficial under these new rules. Consider time-sensitive incentives for solar and energy-efficient upgrades. If you own commercial or multifamily buildings, expedite improvements to secure 179D and 45L benefits.

It's crucial to seek advice on local programs or financing strategies that match your objectives. While OBBBA introduces both opportunities and deadlines, proactive planning can result in substantial financial benefits. Consult with a tax or real estate professional to ensure you’re maximizing every available incentive, especially with key provisions set to expire soon.