President Trump recently signed into law a major tax package that includes several provisions affecting the real estate industry. The National Association of Realtors (NAR) successfully secured its top legislative priorities in the final legislation:

• Permanent extension of the qualified business income (QBI) deduction (Section 199A), allowing eligible independent contractors and small businesses to continue deducting up to 20% of qualified income.
• Temporary increase in the state and local tax (SALT) deduction cap, beginning in 2025. The cap will increase from $10,000 to $40,000 through the 2029 tax year. Beginning in 2030, the SALT deduction will revert back to $10,000.
• Continued protection of business SALT deductions and Section 1031 like-kind exchanges, which are commonly used by real estate investors to defer capital gains.
• Permanent extension of the mortgage interest deduction, maintaining a key incentive for homeownership.

These provisions are expected to provide more financial certainty for both real estate professionals and property owners.
Source: NAR; 7/3/2024