Part 1: The One Big Beautiful Bill Act (OBBBA) and Investment Real Estate:

Urgent Highlights for 2025 and Beyond Tax Planning¹

By Rich Arzaga, CFP®, CCIM

The table below outlines key provisions impacting investment real estate under the newly enacted One Big Beautiful Bill Act (OBBB), compared to the prior 2017 Tax Cuts and Jobs Act (TCJA). The focus is on 2025 action items that may require timely attention from real estate investors and their advisory teams. Understanding these updates can inform planning, transaction timing, and investment strategy before year-end.

Provision	2017 TCJA	2025 OBBBA	What’s Different
1031 Like-Kind Exchanges	Unlimited tax deferral for real property exchanges	Maintains unlimited tax deferral; introduces a safe harbor and enhanced reporting requirements	New compliance framework adds clarity and reduces audit exposure
Section 721 Exchanges	Allowed tax-deferred REIT/UPREIT contributions	No change	No change
Bonus Depreciation	40% bonus depreciation in 2025; phase-out to 0% by 2027	Makes 100% bonus depreciation permanent for qualifying property	Full 100% bonus depreciation reinstated and made permanent
Section 199A Qualified Business Income (QBI) Deduction	20% deduction for pass-through income and REIT dividends; set to expire in 2026	Permanently extends the 20% deduction; adds minimum deduction thresholds for business owners	QBI deduction becomes permanent and expanded
Low-Income Housing Tax Credit (LIHTC)	Maintained 9% and 4% credits	Increases 9% credit allocation by 12%; reduces bond financing threshold for 4% credit from 50% to 25%	Greater access to credits; changes become permanent in 2026

📌 Also see: Part 2: The One Big Beautiful Bill Act (OBBBA) and Investment Real Estate: What’s New with Qualified Opportunity Zones and Funds

¹ This content is for educational purposes only and should not be considered tax advice. Please consult with your tax professional to evaluate how these provisions may apply to your situation.