By Elyce Schweitzer
You’ve probably heard a lot of talk in the news about the federal One Big Beautiful Bill Act (OBBBA). Are you aware of the key real estate-related provisions included within it? As of Friday, July 4, 2025, OBBBA was signed into law and if you’re a title agent, you might be wondering: “What’s in it for me?” Great question. Let’s break it down, provision by provision, with an eye toward how this might shake up demand, supply, homebuying behavior, and evenclosing activity.
1) State and Local Tax Deduction (SALT) Raised
What it does:
Raises the cap on the SALT deduction from $10,000 to $40,000 for married couples (and $20,000 for singles) through 2029. This change boosts federal tax deductibility of property taxes and state/local income taxes—especially meaningful for homeowners in high-tax states—potentially increasing affordability and stimulating demand.
Why it matters for real estate:
This is significant for buyers in places like New York, California, New Jersey, and other high-tax states. For years, the $10,000 cap felt like a hurdle for owning property in pricier ZIP codes. Now, with a juicier deduction, some buyers may re-enter the market, or decide not to relocate to lower-tax states.
Bottom line for title agents:
This may contribute to increased purchase activity in affluent suburban areas and high-SALT cities. Tax relief may create additional incentive to buy. Keep an eye on move-up buyers who had previously been sitting on the sidelines.
2) Bonus Depreciation Is Back (and Permanent)
What it does:
Restores 100% bonus depreciation (first-year write-off) for qualifying property, including many real estate investments retroactive to Jan. 19, 2025. Bonus depreciation allows a business or investor to deduct 100% of the cost of qualifying assets in the first year they’re placed in service, instead of spreading that deduction out over many years.
Normally, with real estate or business assets, you’d depreciate things slowly, for example, over 27.5 years for residential rental property or 39 years for commercial property. Bonus depreciation speeds that up dramatically for some parts of a property.
For a detailed example of how bonus depreciation works in a real estate deal, see Integrity Property Management’s blog dated July, 4, 2025.
Why it matters for real estate:
This is favorable for landlords and real estate investors. Being able to write off the full cost of improvements or qualifying property in year one can enhance cash flow and ROI. That could spur new investment in rental housing, mixed-use projects, and rehabs.
Bottom line for title agents:
You could see more investor activity, particularly in fix-and-flip, build-to-rent, and multifamily deals. This may help offset housing shortages and drive inventory growth, especially in underbuilt markets.
3) Qualified Business Income (QBI) Deduction (Section 199A) Made Permanent
What it does:
Permanently extends the 20% federal tax deduction for QBI for pass-through entities (e.g., S-corporations, LLCs, partnerships, and sole proprietorships), including many rental real estate owners. QBI was originally introduced under the 2017 Tax Cuts and Jobs Act (TCJA). Many real estate investors benefit because rental property income can qualify as QBI if:
- The rental activity is considered a “trade or business” under IRS rules
- The taxpayer materially participates (or uses a qualified management structure)
- There is continuity, regularity, and a profit motive
For further explanation, see IRS publication: Qualified business income deduction, and News Release IR-2019-158.
Why it matters for real estate:
The QBI deduction is a favorite tool in the investor toolkit. Keeping it around makes real estate a more attractive long-term play. This could bring in new landlords and encourage expansion by existing ones, helping to stabilize or grow rental housing supply.
Bottom line for title agents:
Watch for more LLCs and S-corps forming to manage properties. Refinance volume could also rise as investors restructure portfolios to take advantage of long-term tax perks.
4) Rural Loan Interest Tax Exemption
What it does:
Makes 25% of interest income from rural or agricultural real estate loans tax-exempt for qualifying lenders.
Why it matters for real estate:
This is intended to make lending in rural America more attractive. If banks and credit unions see better margins, they may be more likely to fund land purchases, agricultural developments, and rural home construction.
Bottom line for title agents:
This may support a gradual increase in rural closings, especially for farm properties, land deals, and new construction loans. It’s a notable development for regions where affordable housing is in short supply but land is abundant.
5) Real Estate Investment Trust (REIT) Ownership Limit Adjusted (Back to 25%)
What it does:
Resets the cap on how much of a REIT’s assets can be held by a Taxable REIT Subsidiary (TRS) from 20% back up to 25%.
Why it matters for real estate:
REITs are like mutual funds for real estate:
- You buy a share in the REIT
- The REIT owns/operates properties
- You get a piece of the income through dividends
A Taxable REIT Subsidiary (TRS) is a separate company that a REIT owns (or partly owns) to do things the REIT itself isn’t allowed to do, and it pays taxes like a regular company. To give you an idea of how the REIT and the TRS work together, while the REIT is limited to passive income activities and may, for example, own a hotel chain and collect the rent or lease income, it cannot actually operate any of its hotels. That’s where the TRS comes in. It can run those services (e.g. provides room service, spa treatments, cleaning, event hosting, etc.), pay corporate taxes on its income, and then send the after-tax profits to the REIT.
This change offers REITs more flexibility to expand into non-traditional real estate services—think data centers, logistics, and even solar fields—without tax penalty. It may also encourage mergers, acquisitions, and specialty REIT creation.
Bottom line for title agents:
While this is more of a Wall Street play, downstream effects could include more commercial real estate deals, more due diligence, and higher demand for your title expertise in complex REIT-funded developments.
Final Thoughts: Potential Impacts on the Housing Market
While not everything in the “Big Beautiful Bill” was designed specifically for real estate, the collective impact for our industry could include:
- Tax relief that may increase buying power
- Investment incentives that may support additional inventory
- Rural lending provisions that can broaden housing access
- REIT flexibility that can stimulate commercial activity
For title pros, that may translate into more closings, a wider variety of deal types, and renewed activity in both residential and commercial sectors. So, if your late-summer closings start to heat up like your BBQ grill, you may know why!
