Changes To US Tax Code

The Real Estate Espresso Podcast

Changes To US Tax Code

Spotify Google Podcast Apple Podcast Subscribe via RSS Leave a Review

Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce.

On today’s show, we’re discussing the tax reform recently tabled in the US Congress Ways and Means committee. This new bill, ambitiously titled ‘One big beautiful bill,’ is set to introduce a wave of changes that could potentially reshape the landscape for real estate investors. It’s important to note, this is still in the legislative process and some of these provisions may change as it goes through it.

The proposed measures include powerful depreciation enhancements and investments own programs that make crucial adjustments in the existing opportunities on program. There are numerous provisions in the bill, but I’ll be focusing exclusively on those items that are relevant to real estate investors.

The first item on the list is the enhanced depreciation and expensing at the forefront of the bill. There is the 100% bonus depreciation for qualified improved property and other assets. This essentially extends the 100% depreciation which was due to sunset by 2027. This has now been extended until January 1st of 2030.

For investors in industrial and manufacturing real estate, there is a depreciation allowance for qualified production property. This allows a 100% immediate deduction for qualified production properties such as new factories or facilities using manufacturing production or refining. This is as long as the asset has been placed into service after December 31st of last year and before January 1st of 2034.

The bill also proposes raising the expensing limit to two and a half million dollars, increasing from the current one and a quarter million dollar limit in 2025. It also increases the phase out threshold to four million dollars from 3.13 million for Tangible Personal Property, off the shelf software, and qualified real property.

Then there are changes to the Opportunity Zones with the launch of the second round of OZ from January 1st, 2077 to December 31st of 2030.

There’s additional support for investment in rural and agricultural loans, with a measure excluding 25% of the interest income received by qualified lenders on real estate loans that are secured by rural or agricultural property.

The final significant modification is to the low-income housing tax credit, with a proposed increase to the 9% low-income housing tax credit by 12.5% for the years 2026 through 2029.

Overall, while many of these proposed changes are favourable, it’s important to be aware of the elimination of some clean energy tax credits and a limitation on excess business losses that is being made permanent.

This bill is comprehensive and complex, and it’s crucial to read through it in detail and consult with your CPAs. But the changes are coming and they’re poised to impact real estate investors positively.

As you consider your options, have a fantastic rest of your day, make some great things happen, and we’ll talk again tomorrow.

Stay connected and discover more about my work in real estate by visiting and following me on various platforms: