Last Thursday the House of Representatives narrowly passed the final version of President Donald Trump’s and the Republican congressional leadership’s One Big Beautiful Bill Act, delivering the bill by their self-imposed deadline of the Fourth of July. The legislation, a budget reconciliation measure containing major provisions affecting tax policy, federal spending on immigration enforcement, defense, and changes to Medicaid and food assistance, passed with a 218-214 vote after drawn-out negotiations between the administration and Republican holdouts demanding deeper cuts in federal spending. The president signed the measure on the Fourth of July.

Aside from whether the reconciliation measure is ultimately a political plus or minus for the administration, the bill contained major tax policy wins for commercial real estate, many of which were included in NAIOP's tax priorities for 2025. In addition to making expiring income tax rates permanent, the legislation also makes permanent:

• 100% bonus depreciation provisions;
• Section 199A 20% deduction for pass-through businesses;
• A more favorable Section 163(j) limitation on the deductibility of business interest expense;
• The Opportunity Zones program, with important changes.

Proposals we strongly opposed were also excluded from the legislation, including:

• Changes to carried interest taxes;
• Changes to Section 1031 like-kind exchanges;
• Limitations on the deductibility of state and local taxes paid by businesses;
• Retaliatory tax proposals (Section 899) that would have reduced foreign investment in real estate;
• Increased limits on the deductibility of excess business losses (Section 461).

NAIOP will continue to provide information on the reconciliation bill’s impact on CRE as the administration moves to implement its various provisions.