The bill retains the current tax rates while including a range of NAR-supported provisions, including an increase in the qualified business income deduction and quadrupling the SALT deduction.
Capitol building at dusk
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The U.S. House of Representatives passed a long-anticipated tax reform package, the One Big Beautiful Bill Act, early Thursday morning that included several major victories for members of the National Association of REALTORS®. 

NAR’s advocacy team successfully secured its top five tax priorities in the bill—provisions that directly support NAR members and the broader real estate economy. 

The bill permanently increases the qualified business income deduction from 20% to 23%, providing meaningful tax relief to the more than 90% of NAR members who are independent contractors or small business owners. It also quadruples the state and local tax deduction cap from $10,000 to $40,000 for households earning under $500,000, though the marriage penalty remains in place. The bill makes the current individual tax rates permanent and indexes them for inflation, a move backed by 86% of voters in NAR’s national survey. In addition, it preserves and makes permanent the mortgage interest deduction, which remains a crucial benefit for current and future homeowners. Finally, the legislation protects Section 1031 like-kind exchanges and leaves business SALT deductions intact for most real estate professionals. Those deductions are critical tools for property investment and economic development.

In addition to NAR’s top tax priorities, the bill includes a broad range of other REALTOR®-supported provisions, such as enhancements to the low-income housing tax credit, estate tax certainty, renewed Opportunity Zone incentives, and the creation of tax-advantaged child investment accounts that can be used for qualified expenses of the beneficiary such as first-time home purchases—all of which strengthen housing affordability, investment, and generational wealth.

In a voter survey recently commissioned by the National Association of REALTORS®, 80% of voters supported key provisions that impact the real estate economy, from deductions for small businesses to incentives for community investment and housing development. For example, 91% of voters supported retention of the MID, and 61% of voters support increasing the state and local tax deduction issue or removing limits altogether. 

Other Survey Findings

  • 92% favor tax-free savings accounts for first-time home buyers.
  • 86% support keeping lower-income tax rates for individuals and married couples.
  • 83% back the pass-through deduction for independent contractors and small businesses earning under $400,000.
  • 67% support raising the capital gains exemption on the sale of a primary residence.

The national survey of 1,000 registered voters was commissioned by NAR and conducted by Public Opinion Strategies and Hart Research April 3–6, 2025. It has a margin of error of 3.10%

"We appreciate House leaders for taking this important step with this tax reform bill, which supports hardworking families and strengthens the real estate economy. With lower tax rates, SALT relief, and new incentives for small businesses and community development, this proposal brings real benefits to everyday Americans," says Shannon McGahn, NAR executive vice president and chief advocacy officer. 

Republican members of the bipartisan SALT Caucus from high-tax states such as New York and California played a pivotal role in shaping the outcome of the bill’s SALT provisions. 

With House approval secured, the bill now moves to the Senate for further consideration.

"While significant changes are possible as this bill moves to the Senate, NAR will stay closely  engaged with lawmakers to ensure real estate remains a central focus," McGahn says. "We are committed to advocating for provisions that expand opportunity, support homeownership, strengthen communities nationwide, and put the American Dream within reach for more families." 

Top Five NAR Tax Priorities

1. Qualified Business Income Deduction (Section 199A)

  • The bill permanently increases the QBI deduction from 20% to 23%.
  • This deduction benefits more than 90% of NAR members, who are classified as independent contractors or small business owners
  • 83% of voters said they supported the 20% tax deduction for independent contractors and small businesses making less than $400,000 a year, according to NAR’s  national poll.

2. State and Local Tax Deduction (SALT)

  • The SALT deduction cap is quadrupled from $10,000 to $40,000 for households earning under $500,000.  
  • The bill does not eliminate the marriage penalty. Thus, whether taxpayers are single filers or married couples filing a joint return, they can deduct a maximum of $40,000 in state and local taxes.
  • The income cap and deduction both grow 1% every year over a 10-year window.

3. Individual Tax Rates

  • Current individual tax rates, lowered as part of the TCJA, are made permanent and indexed for inflation, aiding taxpayers and improving affordability for prospective home buyers.
  • 86% of voters support the lowered income tax rates for individuals and married couples, according to NAR’s national poll.

4. Mortgage Interest Deduction

  • The draft preserves and makes permanent the MID at its current level, maintaining a key tax benefit for homeowners and supporting housing market stability.
  • There had been concern MID might be reduced or eliminated as a budget offset.
  • 91% of voters support maintaining tax incentives such as the mortgage interest deduction for homeowners, according to the NAR poll.

5. Business SALT and 1031 Like-Kind Exchanges

  • The draft bill protects Section 1031 like-kind exchanges, which are often erroneously regarded as a tax loophole.
  • It also includes no changes for most businesses deducting state and local taxes (sometimes referred to as “Business SALT").
  • While the bill does provide limits in state-level business SALT workarounds for certain high-income professionals (e.g., law firms, hedge funds, consulting businesses, and other services), the provisions do not appear to impact real estate professionals.

Additional Positive Tax Provisions for the Real Estate Economy 

Low-Income Housing Tax Credit (LIHTC)

  • Key provisions from the LIHTC Improvement Act will be included to support affordable housing development.

Child Tax Credit Increased to $2,500 (2025–2028)

  • Temporarily raises the child tax credit through 2028 and then indexes it for inflation starting in 2029.
  • The child tax credit supports families and could help with housing affordability.

Permanent Estate and Gift Tax Threshold Set at $15 Million (Inflation-Adjusted)

  • Prevents a significant drop in exemption levels and supports generational wealth transfer, aligning with NAR priorities.

No Top Tax-Rate Increase

  • The proposed 39.6% top rate was removed from the bill.

Restoration of "Big 3" Business Tax Provisions

  • Full expensing of research and development (R&D)
  • Bonus depreciation
  • Fixes to interest expense deduction limit

Immediate Expensing for Certain Industrial Structures

  • Applies to structures used in manufacturing, refining, agriculture and related industries.

No Change to Carried Interest Treatment

Opportunity Zones

  • Renewed with revised incentives to encourage targeted investment, including in rural areas.
  • 80% of voters expressed support for tax incentives for investors to encourage economic growth and development in underserved and poorer communities, according to NAR’s poll.

Watch for the latest developments at REALTOR® Magazine Media.